This was shared during the Regional Press Briefing on the Middle East and Central Asia in response to a question from Ahram Online regarding debt in the region.

Azour highlighted that the cost of debt service, due to rising interest rates, has become one of the main fiscal challenges facing countries.

He noted a recent trend of greater reliance on local markets for financing local debt, thereby increasing the nexus between governments and these markets.

Azour pointed out that Egypt is partially affected by rising tensions related to regional conflicts, primarily impacting Suez Canal revenues. However, he mentioned that tourism, a sector that employs a large portion of the population, was unaffected.

He identified two levels of impact: the direct effects of the regional conflicts and the broader uncertainty that influences Egypt, particularly in attracting direct investments and inflows.

Azour also acknowledged internal challenges, including high inflation, which reached 35 percent in 2023.

He stated that inflation is expected to decrease, projecting a rate of 16 percent next year.

He explained that the exchange rate flexibility would help mitigate the impact of external shocks on the local economy, enhance credibility for capital flows, and reduce the risk of implementing other measures that might adversely affect economic activity.

In the upcoming visit of the IMF managing director, one of the priority issues to be discussed will be the effectiveness of social protection programmes.