89% Agree: PM Says Currency Deficit Caused by the Israel-Hamas War Will Pass

The International Monetary Fund (IMF) mulls increasing its loan program to Egypt due to the economic dilemmas exacerbated by the Israel-Gaza war.

Real Research, an online survey app, revealed that 84% of respondents (well aware, 42.77% + heard about this, 40.95%)  were aware of the economic impacts of the war on Egypt, and 16% were unaware.

Highlights:

• 91% of respondents believe it is highly likely that if the EU follows through on its investment proposals, it will significantly impact Egypt’s economy.
• 8 out of 10 respondents agree with the Prime Minister’s claim that the foreign currency deficit is a “passing” problem.
• The reduction in natural gas imports and rising domestic petroleum prices have impacted Egypt’s energy sector, according to 82%

IMF Confidence: Egypt’s War Impact

Respondents were asked how confident they were in the IMF increasing Egypt’s loan should the economic impacts of the war on Egypt continue.

In response, 45% of respondents were very confident, 24% were extremely confident, and 28% were slightly confident that the IMF would increase Egypt’s loans if the economic impacts of the war on Egypt persisted. However, 4% of respondents were not confident that the IMF would grant Egypt this loan increase.

Egypt Loan Amid Israel-Gaza Crisis

45% of respondents believe that increasing Egypt’s $3 billion loan program by the IMF would be very effective in mitigating the economic impacts of the war on Egypt. 28% think it would be extremely effective, while 24% consider it to be slightly effective. Conversely, 4% of respondents feel that an augmentation would not be effective at all.

Economic Difficulties Faced by Egypt

The Israel-Hamas war has reportedly impacted Egypt’s tourism sector, which accounts for 15% of the GDP, with tour cancellations rising by as much as 20%. This decline has directly affected the nation’s economy. However, Prime Minister Mostafa Madbouly claimed that the foreign currency deficit is a “passing” problem. Regarding this statement, 89% of respondents agree with the Prime Minister, with 59.55% strongly agreeing and 28.97% slightly agreeing.

Israeli Natural Gas Exports

Since October, Israeli natural gas exports to Egypt have reportedly decreased, leading to a reduction in Egypt’s gas imports. In light of this, 82% of respondents believe the reduction in natural gas imports and rising domestic petroleum prices have impacted Egypt’s energy sector, with 55.77% feeling moderately affected and 25.73% feeling strongly affected.

However, 15% of respondents do not believe the reduction in natural gas imports and rising domestic petroleum prices have affected Egypt’s energy sector, and 4% believe it will not be affected at all.

The European Union

The EU is expected to propose an investment program aimed at mobilizing $9.8 billion (9 billion euros) across various sectors, including energy, transport, agriculture, and digital. This initiative will be highlighted by an investment forum scheduled for spring 2024.

Regarding the potential impact, 91% of respondents believe it is highly likely that if the EU follows through on its investment proposals, it will significantly impact Egypt’s economy, with 56.67% considering it extremely likely and 34.55% moderately likely. Conversely, 6% think it is only slightly likely, and 2% believe it is not likely at all.

Egypt’s Long-Term Sovereign Credit Rating

Global credit rating agency S&P downgraded Egypt’s long-term sovereign credit rating to “B-,” citing the country’s increasing budgetary pressures. In response, 72% of respondents agree with S&P’s assessment, with 52.95% slightly agreeing and 19.15% completely agreeing. Conversely, 23% slightly disagree with the assessment, and 5% completely disagree.

Egypt: Israel-Hamas War Economic Impact

Egypt had reportedly been underperforming even before the Israel-Hamas war, with COVID-19 and the Russia-Ukraine war accelerating its currency’s gradual devaluation. Critics argue that excessive borrowing, unnecessary or premature megaprojects, and heavy reliance on short-term portfolio investment inflows have further contributed to the country’s ongoing crisis.

In response to this situation, 61% of respondents believe Egypt has balanced its economic challenges very well, 25% think it has managed somewhat well, 11% feel it has handled the challenges somewhat poorly, and 3% believe it has handled them very poorly.

Public Concerns on Egypt’s Economy

Finally, 50% of respondents (very concerned, 29.75% + extremely concerned, 20.12%) showed concern regarding the economic difficulties faced by Egypt due to the Israel-Hamas war. However, 26% are slightly concerned about the economic difficulties faced by Egypt, and 24% are not concerned at all.