Minister of Finance Mohamed Maait said that the global economy faces increasing challenges every day due to rising financing costs, tightening monetary policies, increasing interest rates, and global inflation reaching unprecedented levels. Meanwhile, geopolitical tensions keep escalating, leading to a slowdown in global economic growth and putting the budgets of the Global South countries under severe pressure to cover their essential and development needs.
In a session on improving the international monetary and financial system and the prospects for the global economy during the meetings of finance ministers and central bank governors of the BRICS countries, where Egypt is participating for the first time after officially joining this group, Maait stated that the international financial system needs fundamental reforms to amplify the voice of emerging economies.
He explained that the BRICS economies are collectively capable of confronting the impact of negative external factors and overcoming any challenges by mobilizing preferential financing through various effective tools, especially the New Development Bank. Additionally, they can establish trade agreements that rely more on settlements using local BRICS currencies. This can contribute to achieving balanced and sustainable economic growth and meeting the development needs of the people.
“We hope that the credit rating agencies adopt a path that is more understanding of the nature of the current challenges. We also consider that the global economy needs more flexibility to optimally deal with the exceptional variables and uncertainty that dominate the economic scene, especially with the succession of global crises,” Maait said.
He added that the flow of capital to the countries of the Global South has become very slow, reducing the ability of these countries to contain shocks and hindering the development needs of emerging countries. The high financing costs increase the pressure on them and widen the gap between the need to cover basic needs and achieving sustainable development.
The Minister of Finance noted that the current global financial system creates difficult conditions for emerging economies, increasing the need to mobilize soft financing for private investments. He also explained that Egypt’s geographical location qualifies it to play a pivotal and influential role in achieving continental interconnection, in line with the Egyptian state’s goals of transforming into a regional and global center for production and export.
