Cairo – Mubasher: Egypt has to maintain the current economic stability through preserving the flexibility of the exchange rate and further reducing inflation, according to a recent report by the International Monetary Fund (IMF).
The IMF suggests that Egypt should allocate more revenues to pay for much-needed social services and to pump investments into education, health, and infrastructure, the report said.
The North African state should also reduce tax exemptions by making richer people pay progressively more under tax system, the report added, pointing out that making tax administration more efficient will ease this process.
“Revenue could grow by 4% of growth domestic product (GDP) in the medium term as a result,” analysis in the report suggests.
The second proposition includes the elimination of most fuel subsidies, which benefit mainly the rich, in addition to allowing fuel prices to change in line with costs, the report noted.
Accordingly, this would preserve the budget from movements in global oil prices and the exchange rate and protect priority spending on social programmes and necessary infrastructure, the report continued.
These suggestions would help the Egyptian government to cut the budget deficit and control the general debt, the IMF indicated.
The IMF forecast Egypt’s general debts to fell 17% of GDP by the end of the three-year fund’s programme to record 87% by the end of fiscal year 2018/2019.
In October 2017, the IMF projected Egypt’s economic growth to rise to 4.5% in FY17/18 on the back of the reform programme.
