Egypt’s economic rebalancing gains pace despite regional headwinds

Speaking at a recent briefing in Cairo, Simon Williams, HSBC’s chief economist for Central & Eastern Europe, the Middle East and Africa (CEEMEA), pointed to early signs of recovery.

“Inflation is stabilizing, the currency is holding, the budget deficit is easing, and interest rates are starting to fall,” he said.

However, he warned that continued policy discipline was essential, given the ongoing pressure on Suez Canal revenues, the energy sector, and unresolved regional risks.

The Suez Canal Authority has signalled a gradual return to normal shipping operations following an improvement in Red Sea security. This ended the months of disruptions that forced vessels to reroute around the Cape of Good Hope.

The development underscores the canal’s central role in global trade and the Egyptian economy.

Helen Belopolsky, HSBC’s global head of geopolitical risk, said Egypt’s ongoing reform programme placed it in a strong position to benefit from shifting geopolitical dynamics.

She stressed adaptability's importance in policy and business planning amid global uncertainty. “Volatility is not going away—resilience will come from flexibility,” she said.

The briefing also highlighted improved market liquidity and evolving trade flows as indicators that Egypt is increasingly seen as a regional manufacturing hub—an essential step toward boosting exports and reducing foreign currency risk.

The event followed the Central Bank of Egypt’s decision in May to cut key interest rates by 100 basis points amid signs of slowing inflation.

The move is expected to help stabilize the economic environment and support sustained growth.

Around 100 business leaders and clients attended the Cairo briefing, a forum for navigating the region’s fast-evolving economic and geopolitical landscape.