Commenting on the economic outcomes of the Sharm El-Sheikh Peace Agreement in an interview with Bloomberg, Al-Mashat stated: "It is a very important day, not just for the region but for the whole world. We know the Palestinian people have suffered for two years, so reaching a settlement and setting the foundations for peace will be essential for the future of the region. The world was also affected by the economic repercussions of what happened in the Suez Canal, considering it a vital route for international trade.”
Regarding the economic impact of the Gaza conflict,
Al-Mashat clarified that achieving a sustainable settlement that restores calm
to the region would ensure the resumption of ship traffic in the Suez Canal,
which would be "very positive, both for Egypt and for the cost of global
trade."
She stressed that Egypt responded flexibly to the drop in
Suez Canal traffic due to regional tensions by implementing necessary economic
reforms since March 2024, despite the challenges from the conflict. These
reforms included fiscal consolidation, monetary policy adjustments, a flexible
exchange rate, and setting a ceiling for public investments. Al-Mashat added
that these reforms contributed to achieving GDP growth of 4.4% by the end of
June and 5% during the last quarter.
The Minister pointed out that this growth was driven by an
economic model focused on industrialisation, increasing production, and
concentrating on tradable sectors. "If we look at the structure of growth
in Egypt, we find that its sources come from increased industrial activity,
benefiting from the reforms implemented in March 2024," she said.
Al-Mashat further stated: "We are still proceeding with
an ambitious structural reform programme aimed at enhancing competitiveness,
increasing private sector participation, and capitalising on new investments in
the country."
On the future of the Egyptian economy, she affirmed that
Egypt launched the "National Economic Development Narrative" to
identify priority sectors for attracting foreign investment, leveraging the
strong infrastructure built over recent years to support industry and exports.
Al-Mashat projected that 2026 would be a "turning point" for the
Egyptian economy, with actual contributions from real economic sectors,
primarily industry, continued growth in tourism and communications, and
remittances from Egyptians abroad.
She added that strong investment flows have been witnessed
recently, particularly in the Suez Canal Economic Zone, through new investments
or joint ventures, representing favourable opportunities for the Egyptian
economy to increase production, exports, and accelerate the pace of growth.
Addressing the Annual Meetings of the IMF and World Bank,
Al-Mashat explained that Egypt is linked to a programme with the Fund and has
fruitful partnerships with the European Union and the World Bank to enhance
financing sources supporting its "ambitious structural reform
programme," adding that the ongoing reforms would be discussed at the
meetings.
Al-Mashat noted that the credit rating upgrade by Standard & Poor's is "proof that these reforms are moving in the right direction. As stated in their report, there are significant opportunities for growth if we continue to implement these reforms." She concluded: "We are committed to them, and we are working to open up the economy further, increase competition, and overcome the challenges we faced over the past years. All of this is happening despite the difficult geopolitical landscape in the region, but we hope that things will move in a positive direction after yesterday's historic summit in Sharm El-Sheikh, which will positively reflect on the Egyptian economy and enhance gains and returns for investors in Egypt."