Arab Finance: The European Bank for Reconstruction and Development (EBRD) has revised Egypt's economic growth forecast for 2024, with energy and electricity disruptions persisting as down risks, according to the bank’s September 2024 Regional Economic Prospect report.

The bank expects Egypt's gross domestic product (GDP) growth to hit 3.2% in 2024, down from its previous estimate of 3.9%.

It also downgraded its GDP growth forecast for the country in 2025 to 4.5%, down from May’s revision of 4.4%.

Additionally, the report showed that the debt-to-GDP ratio in Egypt is expected to drop 83% in fiscal year (FY) 2024/2025, as the budget deficit stood at 3.6% in FY 2023/2024.

Egypt has faced significant issues in its energy sector recently, with gas shortages leading to rotational power cuts of up to three hours daily across various regions.

Prime Minister Mostafa Madbouly assured last week that electricity cuts have ended, and there will be no return to power outages.

The EBRD report also attributed the recovery of external accounts since the devaluation of the exchange rate last March to the $24 billion worth of foreign direct investment (FDI) from Ras El-Hekma deal and portfolio flows worth over $23 billion.

Moreover, the report highlighted that foreign reserves reached $46.6 billion in August 2024, the highest in five years.

However, the slower-than-expected recovery in private and government investments in the southern and eastern Mediterranean region contributed to lowering growth expectations in the area.

Egypt, a founding member of the EBRD, has received over €12 billion in investments since the bank began operations in the country in 2012.

In July, the EBRD announced plans to inject $705 million into several Egyptian banks during the second half (H2) of 2024.

In the first half (H1) of the year, the bank provided $145 million to three banks and two companies, including $60 million for Commercial International Bank (CIB), $50 million for Banque du Caire, and $25 million for the Export Development Bank of Egypt (EBank).

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