Egypt’s national finances were swept up in the global economic repercussions of the various geopolitical crises in 2023, and inflation inflicted additional pressure.
The year, global rating agencies quickly downgraded their outlooks for the Egyptian national economy and some state-run banks. And the priorities of the International Monetary Fund (IMF) covering its agreements with the Egyptian government changed.
Nonetheless, there was also growing recognition internationally of the importance of supporting Egypt due to its essential role in addressing the crises faced in the region, especially the war in Gaza.
The country’s role in helping prevent the conflict from escalating has taken on global importance and significant influence, even as some regional powers are uncooperative toward Cairo or keen to marginalise it.
The international community, including the United States and the European Union, has relied on Cairo to put forward initiatives over the Gaza conflict and to ease broader tensions. Analysts believe that the renewed international readiness to help Egypt with its current economic crisis comes amid concern at growing regional instability, not only with conflict in Gaza but also in Libya and Sudan.
New loan
And so, the country is thought to have increased the amount it seeks in the new IMF loan to $6bn. That is more than the $3bn the government was initially chasing and comes as a sign of confidence in its status as a stable partner in the region and its diplomatic role in moves toward peace.
Since the outbreak of the war in Gaza, Egypt's precarious relationship with the IMF has been juxtaposed with the seriousness of the situation in the Sinai. The country is already home to around 9 million refugees.
The European Commission recently signalled its support for more aid and investment for Egypt. The bloc seeks to help its North African neighbours strengthen their economies and reduce migration over the Mediterranean.
Read more: Europe moves to boost ties with Egypt amid Israel's war on Gaza