Good afternoon, folks, and welcome to what’s shaping up to be a busy week on the economy front.

THE BIG STORY TODAY

El Sisi, Georgieva talk economic reforms: President Abdel Fattah El Sisi met with the IMF’s managing director Kristalina Georgieva and senior officials today to discuss progress on economic reforms tied to our IMF loan agreement, according to an Ittihadeya statement. The meeting — which follows earlier talks between Kristalina and key Egyptian officials yesterday — comes as the state seeks to renegotiate the terms of our USD 8 bn loan agreement and precedes a visit from a Fund delegation in preparation for the program’s fourth review, which Prime Minister Moustafa Madbouly said is set to begin on Tuesday.

The tone was largely positive: The IMF chief highlighted improvements in Egypt's macroeconomic indicators despite significant regional and international headwinds, citing positive assessments from international rating agencies and increased investment flows. In a possible sign of Fund flexibility, she noted that the IMF “seeks to find the best reform trajectories that address all relevant dimensions” in order to sustain the positive impact of the reforms.

Getting inflation under control is key: Georgieva also noted that the Fund agrees with its Egyptian counterparts that tackling inflation needs to be a key priority for the government and its international partners. Rising energy costs — a substantial part of which is accounted for by fuel prices — have been acknowledged as driving two consecutive monthly upticks in inflation.

Next up — the green economy: The IMF managing director added that the green economy will be the focus of upcoming discussions next week, without going into further detail.

THE BIG STORY ABROAD

Meanwhile, the foreign press is focused on US presidential hopefuls Kamala Harris and Donald Trump’s final rounds of campaigning ahead of election day, with Harris visiting the state of Michigan on Sunday and the Trump campaign set to make a stop in three eastern battleground states — Pennsylvania, North Carolina, and Georgia — in what opinion polls indicate will be a historically close race to the presidency. A recent poll shows Harris taking the lead over Trump in Republican-leaning Iowa — a state that Trump won in the last two US elections —- with the Democratic candidate set to campaign in East Lansing, Michigan, a town viewed as a must-win for her campaign. (Reuters | Financial Times)

** CATCH UP QUICK on the top stories from today’s EnterpriseAM:

  • The FinMin’s key economic indicators for 1Q 2024-25: Egypt has seen its budgetdeficit narrow, its primary surplus expand, and its revenues up during the first three months of FY 2024-25, despite ongoing regional conflict.
  • Fitch Ratings upgraded our credit rating from ‘B-’ to ‘B’ with a stable outlook for the first time since 2019, citing FX inflows from the USD 35 bn Ras El Hekma agreement, our expanded USD 8 bn IMF program, and the EU’s EUR 7.4 bn aid package, alongside greater confidence in the durability of our structural reforms.
  • IMF strikes upbeat tone on Egypt’s medium-term growth: The IMF expectsconstraints on Egypt’s growth to ease as regional tensions subside and structural reforms are implemented.

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*** It’s Inside Industry day — your weekly briefing of all things industrial in Egypt. Inside Industry focuses each Sunday on what it takes to turn Egypt into a manufacturing and export powerhouse, ranging from initial investment and planning to product distribution, through to land allocation to industrial processes, supply chain management, labor, automation and technology, inputs and exports, regulation and policy.

☀️ TOMORROW’S WEATHER- The city had some sun this weekend but it’s still maintaining its cool with highs of 27°C and a low of 19°C in the capital tomorrow, according to our favorite weather app.

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