Cairo – Mubasher: The International Monetary Fund (IMF) has reached a staff-level agreement with Egypt on the fourth review of the North African country’s economic reform programme to disburse another $2 billion from the $12 billion extended fund facility (EFF).
This came on the sidelines of a visit by an IMF mission led by the organisation’s Middle East and Central Asia assistant director Subir Lall to Cairo to conduct the fourth review of Egypt’s economic reform programme, according to a statement by the Washington-based lender.
“The Egyptian economy has continued to perform well, despite less favorable global conditions, supported by the authorities’ strong implementation of the reform program,” the statement highlighted.
Egypt’s gross domestic product (GDP) accelerated to 5.3% in fiscal year 2017/2018 from 4.2% in FY16/17, while the unemployment rate fell below 10%, it added.
The IMF said the current account deficit of the Arab world's most populous country fell to 2.4% of GDP in FY17/18 from 5.6% in the previous fiscal year on the back of solid remittances and tourism recovery.
Gross general government debt dropped 93% of GDP in the previous fiscal year from 103% of GDP in FY16/17, driven by fiscal consolidation and higher growth.
Moreover, the US-based organisation noted that the Central Bank of Egypt’s (CBE) monetary policy helped ease annual inflation to 11.4% in May 2018 from 33% in July 2017.
“Inflation increased again to about 16 percent in September 2018, reflecting the pass-through from energy price increases in June and a stronger than expected increase in volatile food prices in September. In the medium term, the CBE aims to reduce inflation to single digits,” the IMF said.
The IMF also added that further tightening in the emerging markets financing conditions, as well as the CBE’s efforts to maintain a flexible exchange rate policy, will “will help enhance competitiveness, protect Egypt’s foreign reserves, and cushion against external shocks.”
The Arab country’s banking system is still “liquid, profitable, and well capitalized”, according to the statement.
The Egyptian government is determined to carry on energy subsidy reforms and raise revenues that will “help create fiscal savings to invest in a well-targeted social safety net, human development including health and education, and infrastructure”, it noted.
