Egypt Secures Bail-Out Amid Economic Instability
To navigate through its economic challenges, Egypt has successfully secured a bailout, marking a significant moment in its financial management.
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In a dramatic turn of events, Egypt, has secured essential financial assistance. Yet, this substantial help from the United Arab Emirates (UAE) does not resolve the enduring issues facing the country.
Historically, the prosperity of Egypt was closely tied to the annual floods of the Nile, essential for agriculture and the stability of its rulers. Today, instead of looking to the natural resources within its borders, Egypt turns its gaze towards the wealthy Gulf states for economic salvation.
On February 23rd, an agreement was reached between Egypt and the UAE, marking the largest urban land transaction in Egyptian history through a $35 billion development deal for Ras el-Hekma, a prime Mediterranean coastal area. This venture aims to replicate a Dubai-esque environment with the construction of residential units, hotels, and shopping complexes, while Egypt retains a 35% interest in the project.
Navigating Economic Crisis with International Support
Far beyond a simple land deal, this pact serves as a crucial financial safeguard for Egypt, which was on the cusp of economic collapse due to prolonged debt accumulation.
Following this agreement, a surge of international support materialized, highlighted by the IMF amplifying its loan offer to Egypt from $3 billion to $8 billion, complemented by a €7.4 billion ($8 billion) financial aid from the EU and a further $6 billion from the World Bank.
This collective infusion of over $50 billion provided a temporary stabilizing force to Egypt’s shaky economic condition. Nevertheless, the UAE’s contribution comes with expectations.
Beyond aiming for a profitable outcome, it intends to wield greater control over Egypt’s administrative decisions, despite the potential obstacles arising from Egypt’s preference for state-driven initiatives and the uncertain outcomes of such large-scale urban projects.
Challenges Ahead Despite Economic Relief
Moreover, this collaboration has sparked renewed discussions about Egypt’s commitment to the economic changes it promised the IMF, including liberalizing its currency and reducing the heavy influence of the state in the economy.
Despite early efforts towards these reforms, skepticism remains about their comprehensive implementation and success. Rising inflation, which greatly affects the cost of living, highlights the gap between the government’s optimistic predictions and the actual economic turbulence.
While the latest influx of financial assistance has provided temporary relief, it does not address the core economic issues that still jeopardize Egypt‘s stability and progress.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Employment grew for the 16th consecutive month as companies expanded.
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According to a recent PMI report, Qatar experienced its fastest non-energy sector growth in almost two years in June, driven by surges in both existing and new business activities.
The Purchasing Managers’ Index (PMI) headline figure for Qatar reached 55.9 in June, up from 53.6 in May, with anything above 50.0 indicating growth in business activity. Employment also grew for the 16th month in a row, and the country’s 12-month outlook remained robust.
The inflationary pressures were muted, with input prices rising only slightly since May, while prices charged for goods and services fell, according to the Qatar Financial Centre (QFC) report.
This headline figure marked the strongest improvement in business conditions in the non-energy private sector since July 2022 and was above the long-term trend.
The report noted that new incoming work expanded at the fastest rate in 13 months, with significant growth in manufacturing and construction and sharp growth in other sectors. Despite the rising demand for goods and services, companies managed to further reduce the volume of outstanding work in June.
Companies attributed positive forecasts to new branch openings, acquiring new customers, and marketing campaigns. Prices for goods and services fell for the sixth time in the past eight months as firms offered discounts to boost competitiveness and attract new customers.
Qatari financial services companies also recorded further strengthening in growth, with the Financial Services Business Activity and New Business Indexes reaching 13- and nine-month highs of 61.1 and 59.2, respectively. These levels were above the long-term trend since 2017.
Yousuf Mohamed Al-Jaida, QFC CEO, said the June PMI index was higher than in all pre-pandemic months except for October 2017, which was 56.3. “Growth has now accelerated five times in the first half of 2024 as the non-energy economy has rebounded from a moderation in the second half of 2023,” he said.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
