Finance development for post-crisis economic recovery

Résumé

In today's uncertain world, the role of financial development in stabilizing the economies of emerging and developing countries has become a topic of great interest. This research focuses on the Middle East and North Africa region, specifically examining how finance contributes to post-economic crisis recovery, with a special emphasis on Egypt's economy. To achieve our objective, we employ descriptive analysis of various macroeconomic indicators, such as real gross domestic product (GDP), inflation rate, and unemployment levels, to gauge economic recovery. Additionally, we consider different financial variables, including private credit to GDP, bank lending-deposit spreads, and qualitative aspects of the financial system, as measures of financial development in Egypt. Furthermore, we take into account the interaction of monetary and fiscal policies, as well as trade openness, to understand other factors influencing the recovery process. Our analysis confirms that the level of financial development in Egypt played a crucial role in mitigating macroeconomic shocks. Thanks to economic reforms and regulatory measures taken since the 2008/2009 global financial crisis, Egypt's financial sector has shown significant improvement. During recent crises, such as the Covid-19 pandemic and the Ukraine-Russia conflict, the financial sector demonstrated resilience in facing economic shocks and played a vital role in facilitating lending and borrowing through deposit channels. Rapid credit supply at low-interest rates, which increased by 21.1% in 2022, and substantial inflows of deposits to households and firms, rising by 13%, were instrumental in supporting the recovery. Additionally, the domestic treasury bills market attracted foreign direct investment, further boosting the country's recovery.These findings underscore the positive relationship between finance and economic recovery. Notably, the private sector and household consumption levels experienced steady growth in 2022. Furthermore, this research highlights the importance for oil-exporting countries to develop their stock capital markets, as this move can provide them with greater benefits. Moreover, the study identifies relevant systemic risks that policymakers should consider. In conclusion, this paper sheds light on the vital role of financial development in Egypt's post-crisis economic recovery. The findings can serve as valuable insights for policymakers and stakeholders seeking to promote economic stability and growth in similar contexts.

la date de réponse	7 sept. 2023
langue originale	Anglais
L'institution diplômante	Universite de Namur
Superviseur	Yuliya Rychalovska (Promoteur)