IMF: Egypt’s ambitious reforms have contributed to realisation of economic stability
CAIRO, July 15, 2018 - The economic reform measures adopted by the Egyptian government have contributed to achieving economic stability in the country, the International Monetary Fund (IMF) Mission Chief for Egypt, Subir Lall, said.
The package of ambitious economic reform measures under Egypt’s national programme, has led to the realisation of several important achievements including in the foremost reducing inflation, reinvigorating the economy, improving growth rates and cutting unemployment rates, Mr Lall said in exclusive statements he gave to the official Middle East News Agency (MENA) Sunday.
The economic reforms have included the liberalisation of the exchange rate, cutting energy subsidies, applying the value added tax (VAT) and improving the investment climate by issuing a number of laws such as the investment and industrial licence laws, he noted.
In its third major review of Egypt’s loan programme last Thursday, the IMF maintained a favourable outlook for Egypt’s economy. On July 5, Egypt announced that it had a primary budget surplus for the first time in 15 years.
Finance Minister Mohamed Maeet said Egypt achieved a 0.2 per cent primary budget surplus, worth LE4 million ($223 million), in its 2017-2018 fiscal year. It is aiming for a 2 per cent primary surplus in the current fiscal year.
Foreign reserves also rose by the end of June to $44.258 billion from $44.139 billion, continuing their climb since the country secured the $12 billion IMF loan, according to the Central Bank of Egypt (CBE).
Foreign investment in equity and debt markets has reached record highs since the country embarked on the reforms, Reuters reported.
Mr Lall commended the government for initiating measures to increase spending in the health and education sectors and introduce such structural reforms as would facilitate the start of business enterprises, the encouragement of entrepreneurship, the promotion of small and medium-scale enterprises and the improvement of transparency in state-owned establishments
Creating new job opportunities and raising the standard of living contribute to effectuating the realisation of higher growth rates, the IMF mission chief said. He referred in this connection to the government’s move to expand the social protection nets and support the social protection programmes for deserving segments.
He pointed out that the bonuses for civil servants reached about 7 to 10 per cent of total salaries, noting that social insurance pensions rose by 15 per cent.
Mr Lall said that the government has boosted the foreign competitiveness and expanded restructuring reforms under its national programme to help overcome the main obstacles facing the private sector.