Cairo hosted the International Monetary Fund’s (IMF) first-ever MENA ResearchConference this week, which featured big names talking about even bigger topics. Day one of the two-day conference (watch, runtime; 7:50:27) brought together academics, researchers, and policymakers to discuss regional and global economic issues. Not all of us have a spare eight hours to catch up with what happened on day one, so we put together the top ten key takeaways to get you up to speed:

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#1- Global headwinds complicate MENA’s path: The global economic landscape is fraught with “trade tensions and increasing uncertainty,” alongside ongoing regional conflicts and climate risks, creating new layers of complexities for MENA policymakers, said IMF MENA and Central Asia Director Jihad Azour.

#2- The region’s highly indebted countries face an unsustainable financial path: Policymakers, academics, and IMF bigwigs all warned that the current financial trajectory for highly indebted middle-income countries is unsustainable in the MENA region — including Egypt as a prime example. Lebanese economist Ishaq Diwan explained that “the current financial path is unsustainable. If we continue in these countries on the same path, there's financial disaster — we run into a wall”.

#3- Policy makers face a “fiscal trilemma”: Countries are struggling to simultaneously achieve growth and development goals, ensure debt sustainability, and avoid crossing political red lines, but countries can only effectively choose two of these, IMF Chief Economist Pierre Olivier Gourinchas said.

#4- Growth is the only stable solution for the region: The consensus among some experts is that the only stable and long-term solution to the region's fiscal and social challenges is to ignite significant growth. This requires a shift in strategy beyond fiscal adjustments. Many MENA countries, including Egypt, have experienced a lost decade of slow growth and rising debt, which “fiscal adjustment alone is not sufficient” to fix, according to Diwan. Instead, Diwan proposed that a fundamental shift toward a growth-oriented model, potentially with international support, is imperative.

#5- Structural reforms, not just fiscal policy, are key to growth: The IMF's view, shared by some panelists, is that achieving sustainable growth primarily depends on structural reforms that improve resource allocation and productivity in the medium term, rather than relying on fiscal policy itself to directly stimulate growth. Gourinchas explained that “when we talk about growth, it seems to me it's not so much about fiscal policy per se but about structural reforms — it's about the things that will improve resources and productivity in the medium term.”

#6- Egypt's high debt service burden and market skepticism: Although Egypt is embarking on a plan to significantly cut the amount it allocates to debt servicing through improving the country’s creditworthiness to borrow for less and restructuring debt, alongside a fall in global interest rates, Diwan warns that investors appear unconvinced. The differences in yields between Egyptian bonds on one hand and US and European bonds on the other point toward a continued belief that Egypt will remain a risky wager with the higher interest rates to match.

#7- Egypt is crowding out of private sector credit: Egypt was presented as a “classical case” where increasing government borrowing has led to a continuous decrease in credit available to the private sector, hindering its potential dynamism and contributing to low investment levels, said AUC Economics Professor and former Deputy Planning Minister Ahmed Kamaly.

#8- Egypt's industrialization hopes tied to regional integration: Panelists emphasized that for nations like Egypt to realize ambitious industrial policy goals and economic diversification, deeper regional coordination is paramount. “Without some kind of regional coordination there is a glass ceiling in terms of what can be achieved,” argued economist and academic Amir Lebdioui, highlighting the need to overcome individual market size constraints and leverage complementary strengths across MENA. This sentiment was echoed by fellow economist and academic El Mouhoub Mouhoud, who pointed to intra-regional trade transaction costs being “four times higher than trade between MENA countries and Europe,” suggesting that greater integration, potentially driven by GCC leadership, could help drive Egypt's economic development.

#9- Act preemptively, don't wait when it comes to inflation: Central banks across the region were generally “too slow” to react to the recent global inflation surge, said economist and academic Kristin Forbes. The key lesson is for monetary authorities to “act preemptively” and focus not just on the inflation peak but the “duration of deviations.”

#10- Lessons from Egypt's past industrial policy and the need for a new approach: Egypt's historical experience with industrial policy, such as targeting labor-intensive sectors like ready-made garments, which still faced competitiveness issues, was brought up. This highlights the need for any new industrial strategy to carefully identify latent comparative advantages and avoid past pitfalls of insufficient protection or coordination, a theme resonating with expert calls for smarter, targeted state facilitation.

ALSO- IMF Deputy Managing Director Nigel Clarke dropped by the Lynx Forum on Sunday during his trip to the country to accompany the Fund delegation in town for its fifth review of Egypt’s Extended Fund Facility Arrangement. Clarke discussed the ongoing structural reforms, the challenges facing the private sector, and more with Lynx and senior executives from energy, banking, fintech, telecom, healthcare, F&B, automotive, and engineering sectors.

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