Egypt's Al-Mashat on Economic Impact of Gaza Plan

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00:00Egypt, of course, our center stage with that Gaza peace ceremony taking place in Sharam

00:04al-Sheikh, and Egypt being one of the key countries that was mediating to get the peace

00:09deal across the line.

00:10Your thoughts on the significance of today and what it could potentially mean for regional

00:15stability?

00:17Well, thank you very much.

00:19Yes, it's a very important day, not just for the region, but for the world.

00:23We know that there has been two years of suffering by the Palestinian people.

00:28So to reach some resolution and put in the foundations for peace is going to be fundamental

00:36for the future.

00:37Moreover, the world has also been affected by the economic implications of what has happened

00:42in the Suez Canal as a route for international trade.

00:48So we are looking forward to a good day, a day where you have leaders from around the

00:54world.

00:55Our president, His Excellency Abdel Fattah al-Sisi, has been very resolute since the beginning

01:00with a very clear vision, a vision of resolution and a vision of pushing forward with respect

01:07to the rights under international law.

01:12You mentioned the economic impact the regional instability has had, not least on Egypt, the

01:18transits through Suez Canal.

01:19How do you expect upside risk to present itself in the coming months, should this deal actually

01:27hold?

01:29Just looking at the participation globally, the deal being brokered through President Trump

01:38and also the help of Egyptian leaders as well as those from the region, we do look forward

01:47to seeing a more lasting resolution, one that provides calm in the area.

01:54And therefore, with the resumption of Suez Canal vessels moving in there, I think that is going

02:01to be very, very positive, whether it is for Egypt or for the cost of trade globally.

02:11With the hit to some of the receipts coming through from the Suez Canal, what remedies did

02:17the government put in place to sort of try to compensate for that?

02:22We have embarked on very important reforms in March 2024.

02:29And this is despite the headwinds from the impacts of the conflict in the region.

02:37This was reforms related to fiscal discipline, monetary policy, a flexible exchange rate, caps

02:46on public investments.

02:48All of this has led to a GDP growth, which is now averaging 4.5 percent.

02:56Last quarter was 5 percent.

02:57All of this pushed by an economic model that is based on more industrialization, more tradables.

03:04When you take a look at Egypt's GDP growth, you will see that the sources of growth have

03:09come from more economic activity in manufacturing, again, benefiting from the very important reform

03:16reforms that happened, macro reforms that happened in March 24.

03:20This is continuing through a very ambitious structural reform program where we are looking

03:26at increasing competitiveness, increasing private sector engagement, and also benefiting

03:31from green investments in the country.

03:36Yeah.

03:36And indeed, the S&P upgrades came through last week, which is an endorsement of some of the

03:41policies that you've put in place.

03:43Egypt has signed a number of agreements, investment deals over the last 18 months or so with the

03:50likes of UK, EU, UAE, obviously, to name a few.

03:54What other partners are you looking for?

03:57And could we expect to see more of these types of deals in the coming months?

04:01So we have been, we've put together a very detailed economic reform program and named Egypt's

04:11narrative for economic development.

04:13In it, we identify sectors which are considered priorities to attract foreign investments and

04:21also benefit from the very robust infrastructure that was put in place over the past few years.

04:29So when you mention UK, when you mention the EU, UAE, other countries, there is a lot of

04:37inflows with respect to investments in different areas, particularly in ports.

04:43The tourism is doing very well.

04:46We feel that 2026 is going to be an infliction point where the different sectors are going to

04:54be contributing, notwithstanding, of course, the decline in the Suez Canal receipts.

05:00We've seen a rebound in remittances.

05:02We've seen a rebound in tourism.

05:05And as I mentioned, what is key for growth and jobs has been manufacturing.

05:10And we see many companies coming in the Suez Canal economic zone and many other places to

05:16actually either increase equity in existing companies, do joint ventures, or actually start

05:23new firms.

05:24So all of this is a story which is evolving in a steady way.

05:30And the benefits we are seeing in lower inflation, greater productivity and higher GDP growth.

05:36Yeah.

05:38And Rania, I know you're a very busy lady and you're heading on to the IMF meetings this

05:44week.

05:44Egypt's program obviously up for a review.

05:48What are some of the key items that are going to be discussed?

05:51So for us, we are traveling to Washington for the World Bank and IMF meetings.

06:00As you know, Egypt under the IMF program has also important partnerships with the EU, with

06:09the World Bank.

06:10So there are different sources of financing linked to our ambitious structural reform program.

06:16As I mentioned, we look forward to discussing the reforms that are taking place.

06:23The S&P upgrade, as you mentioned, was a testament that these reforms are gaining traction.

06:29And as was mentioned in that report, there are many points to the upside, provided we are

06:36continuing with the reforms.

06:38We are committed to the reforms.

06:41We are opening up the economy, increasing competition, and also trying to reduce the bottlenecks

06:47that we have seen over the past years.

06:51Once again, this is happening despite the very tough regional geopolitical landscape.

06:57So as this is also going to be hopefully moving in the right direction after today's big summit

07:04in Sharm el-Sheikh, this is all going to be positive for the Egyptian economy.

07:07And therefore, there are very important dividends and gains for those who invest in Egypt.

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