The document showed that the Egyptian government aims to reduce inflation to 9.2 percent on average between 2024 and 2028, and five percent by 2030.

The government also intends to decrease the annual current account deficit to 2.6 percent of GDP on average in 2024-2028, said the document, which is planned to be discussed publicly before receiving official approval.

Egypt’s current account deficit reached $4.71 billion in FY2022/2023 – ended in June – which accounts for 1.42 percent of the country’s $330.1 billion GDP (official market rate). The GDP stood at EGP 10.2 trillion in FY2022/2023, as per data released by the Ministry of Planning.

The country has been suffering an economic crisis since March 2022, which resulted in the pound losing more than half of its value, dropping against the USD from EGP 16 to EGP 31 in the official market and more than EGP 50 in the parallel market.

According to a report by Fitch Solutions’ BMI Country Risk and Industry Analysis, the US dollar exchange rate is expected to jump to EGP 39.7 through the end of 2024.

A report by brokerage firm Cairo Capital Securities (CCS) in December expected the Central Bank of Egypt (CBE) to apply a free-float system under which the USD/EGP rate is likely to approach EGP 40 in the second half of 2024.

Egypt has been actively pursuing the completion of the four-year loan programme with the International Monetary Fund (IMF), which allows the country to access $3 billion in eight installments, with hopes to increase it to $5 billion.

Key commitments for Egypt under this programme include implementing flexible interest and exchange rate regimes, promoting private sector participation, reducing debt and inflation levels to pre-pandemic figures by the programme's end, and offering stakes in 35 state-owned companies to strategic investors by 2024.

A mission from the fund would probably visit Cairo in January to finalize a new time frame for the loan agreement with Egypt, said Cabinet Spokesperson Mohamed El-Hommosani last week.

Egypt experienced a surge in headline inflation rates during the first nine months of 2023, reaching its peak in September at 40.3 percent.

However, the inflationary trend began to decelerate in October 2023, with the annual headline inflation rate declining to 36.4 percent in November 2023, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

The country is seeking additional funding to close a $17 billion financing gap by 2026, projected to be between $6 and $8 billion for FY2023/2024.