According to HSBC Bank’s recent forecasts, every 10% increase in the price of oil might result in a 0.36% yearly increase in inflation in Egypt.
Net exports, foreign investment &foreign debt
The contribution of net exports to GDP is predicted to rise from -3.7% this year to a -0.6% the following year.
Net exports to GDP
The net exports-to-GDP ratio is an indicator of the relative importance of international trade in the economy of a country.
Egypt’s net foreign direct investment is expected to reach $4.5 billion in 2023, up from $3.5 billion this year. The country’s foreign reserves will climb to $43.6 billion from $42 billion, according to the bank.
Egypt’s external debt is set to increase by $5 billion next year to $147 billion. with a decline in debt as a proportion of GDP to 28.4% in 2023, down from 30.7% in 2021.
External Debt 🌎
External debt is the portion of a country’s debt that is borrowed from foreign lenders.
Public debt & budget deficit
Egypt’s national debt as a percentage of GDP will fall to 86.8% in the current fiscal year, down from 91% in 2021, and will reach 84.2% in the next fiscal year.
debt-to-GDP ratio is the ratio between a country’s government debt and its GDP. A good debt-to-GDP should be below 60%.
The budget deficit forecast is expected to fall to 7.6% of GDP this fiscal year, down from 8% last year, and to 7.5% next fiscal year.
Budget deficit 📉
A budget deficit occurs when expenses exceed revenue and indicate the financial health of a country.
Cash reserves are the backbone 💰
Egypt’s ability to handle current challenges is aided by its ability to maintain a substantial cash reserve until exports recover, import growth slows, & foreign investments begin to recover.
Although the bank expects inflation to remain around 9%, other predictions suggest that it would increase more than HSBC’s expectations, prompting the CBE to boost interest rates, especially if the global interest rate hikes continue.