Currency, inflation woes in focus as Egypt's Sisi set for third term

investing.com:

By Patrick Werr

CAIRO (Reuters) — In the run-up to Egypt's Dec. 10-12 presidential election, financially strapped people queue at state-managed cooperatives trying to buy scarce rations of subsidised sugar.

It is the latest sign of economic pressures that have risen sharply since early last year, leaving Egyptians grappling with soaring prices and an unresolved foreign currency crunch, and overshadowing pledges to push through delayed reforms.

Despite the economic woes, President Abdel Fattah al-Sisi is expected to cruise to a third term, with credible opposition movements sidelined or crushed and the Arab world's most populous country distracted by the war in neighbouring Gaza.

But once the vote is over, analysts will be watching closely for austerity measures they believe were postponed for the elections and could start to put Egypt's finances back in order.

That will be a steep challenge.

Years of prodigious borrowing abroad has left Egypt with heavy foreign debt and a shortage of the hard currency needed to buy essential commodities.

Disbursements in a $3 billion financial support package from the International Monetary Fund signed in December 2022 were halted after Egypt fell behind on its pledge to adopt a flexible exchange rate, as well as pull the state and the military back from their dominant position in the economy.

In the last few months, an already weakened currency has plunged to about 50 pounds to the dollar on the black market compared to the official rate of 31 pounds. Debt repayments due in 2024 stand at an all-time high of at least $42.26 billion, according to central bank data.

Keen to avoid unrest at a time of election tensions, the cabinet announced in October it had agreed with private producers