Today, Friday, marks a year since the start of the Russo-Ukrainian war, which has had a clear impact on the economies of developing countries as they grapple with global inflation and the high dollar value. The Egyptian economy is an example of the impact of the war on Ukraine, after the war wiped out its gains over the past six years.
The war in Ukraine has brought to naught 6 years of achievements of the Egyptian economy since the launch of the economic reform program in cooperation with the International Monetary Fund in 2016.
Egypt’s foreign exchange reserves fell to their lowest level in August at $33.14 billion from $41 billion in February.
The pound was devalued 3 times, interest rates increased by 800 basis points, core inflation at the end of January last year was 31.2% year on year, foreign investment in debt instruments amounted to $22 billion.
These effects, albeit with less intensity, recurred in a number of developing countries against the backdrop of the continuing impact of the war on the world economy as a whole. However, these effects may have been exacerbated in Egypt as a result of its economic relations with Russia and Ukraine.
Ayman Yassin, CEO of Business Community Group, says the impact on Egypt has been direct due to tourism, wheat and grain prices and foreign investment.
To get out of the crisis, Egypt has turned to the International Monetary Fund in a new agreement under which it will receive a $3 billion loan.
Ahmed Samir, a member of the Egyptian Senate, said 2023 and 2024 will be the worst years for the Egyptian economy, with a recovery starting in 2025.
The suffering of the Egyptian economy is not expected to end any time soon, especially as the Russian-Ukrainian war continues and its impact on the global economy coincides with the tightening of monetary policy that pushed global interest rates to record levels. making it difficult for developing countries to obtain or maintain funding.
