51 brokerage companies granted licences to offer short-selling in Egypt's stock exchange    China makes unexpected short-term funding rate cut, the first since 2015    Kuwait PM Jaber al-Mubarak declines reappointment as prime minister    To prevent dementia, exercise is the answer – researchers say    Tennis: New Davis Cup format must be given chance to succeed, says Murray    LIVE: Comoros v Egypt (2021 Africa Cup of Nations qualifiers)    Iran's Khamenei backs fuel price hike, blames ‘sabotage' for unrest    Protesters block entrance to Iraq's Umm Qasr port    Hong Kong protesters pinned back on campus, violence escalating    European shares climb as U.S.-China trade talks dominate sentiment    Banks elevate Saudi stocks; other Gulf mixed    Netherlands back where they belong: Van Dijk    What's next: Trump impeachment hearings enter crucial stretch    Sisi flies to Germany to attend G20 Compact with Africa meetings    Lebanon banking association agrees $1,000 weekly withdrawal cap: Statement    In Photos: Cairo Circus promises impressive shows this season    Bank workers in Lebanon to remain on strike on Monday: Union    Apple Watch detects irregular heartbeats in US study    Egypt's El-Badry promises performance will improve after Salah's return    Saudi Aramco to sell small stake on Riyadh exchange    Egypt to host the second trilateral meeting over GERD in December    The Jobs with the best and worst heart health according to Bupa study    Children are nearing slavery due to digital development: Al-Azhar grand imam    Big production Mamalek El-Nar to scan Ottomans' history on Saudi MBC    Bridging East and West: Egyptian musicians Abdallah Abozekry and Ali Baghdady in Paris concerts    Six people killed, 16 injured in fuel pipeline explosion in Behaira    Liverpool's forward Salah out of Egypt games with ankle problem    GERD: An ‘adaptive' agreement    10 tips to have your 30s starting a lifelong success    Nike to investigate its Oregon Project following Mary Cain's NYT op-ed    ‘Shining' sequel ‘Doctor Sleep' targets $25 mln opening, has Stephen King's blessing    Sisi: Egypt believes in comprehensive approach to human rights    Egypt rejects politicised reports on human rights conditions – parliament    Egypt to vote on 3-month extension of state of emergency Monday    Al Pacino says follows this mantra on every acting job    Remembering Mustafa Mahmoud, philosopher of his time    Court sentences six to death, 41 to lifetime imprisonment violence related case    Trump says he would release Mideast peace plan after Israeli elections    ACWA Power compares 3 bids to supply production units for Luxor power station    What do you know about gold alloying?    NBE announces EGP 2.5m prizes for handball youth teams for their world achievements    Jennifer Lopez evokes Egyptian outrage post her North Coast performance    Al-Sisi honours Egypt's scholars on Science Day    IS claims responsibility for suicide bombing killing 63 in Afghan wedding    Political parties gear up for parliamentary, senate, local elections    Unprecedented Glory: Egypt win Men's U-19 World Handball Championship    12th National Egyptian Theatre Festival fuel up public theatre art scene    Ministry of Environment has a plan for "black clouds season"    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

IMF positive about Egypt's economic trajectory
Published in Ahram Online on 13 - 10 - 2019

Egypt has successfully completed the three-year arrangement under the Extended Fund Facility and achieved its main objectives, according to the fifth and final International Monetary Fund (IMF) review on Egypt in the wake of disbursing the last tranche of the IMF's $12 billion loan.
The review also asserted that Egypt's macroeconomic situation has improved markedly since 2016, driven by authorities' strong ownership of the economic reform programme and decisive policy actions.
"Critical macroeconomic reforms have been successful in correcting large external and domestic imbalances, achieving macroeconomic stabilisation and a recovery in growth and employment, and putting public debt on a clearly declining trajectory," according to the IMF.
It added that Egypt's monetary policy remains anchored by the medium-term objective of bringing inflation to single digits. While core inflation appears to be well contained, the Central Bank of Egypt (CBE) should remain cautious until disinflation is firmly entrenched, the IMF said.
"Exchange rate flexibility remains essential to improve resilience to shocks and preserve competitiveness, and the FY 2018/19 primary surplus target of two percent of GDP was met, helping to anchor a further decline in the public-debt-to-GDP ratio. It will be important to maintain primary surpluses at this level over the medium term to keep public debt on a downward trajectory," the review said.
The review also touched on the phasing out of fuel subsidies, describing their elimination as encouraging energy efficiency, helping to protect the budget from unexpected changes in oil prices, and free up fiscal space for social spending. It added that improved revenue mobilisation is also essential to spending on health, education, and social protection.
“The outlook remains favourable and provides an opportune juncture to further advance structural reforms to support more inclusive private-sector led growth and job creation. The authorities have launched important reforms of competition policy, public procurement, industrial land allocation, and state-owned enterprises, and sustained implementation will be essential to ensure that statutory changes achieve meaningful results in the business climate. Deepening and broadening of effective reforms is critical to underpin the positive outlook for growth and unemployment," reads the review.
The review found that recent volatility in inflation is mainly attributable to developments in the prices of fruits and vegetables, adding that core inflation, which excludes volatile and regulated items, is contained at around eight percent.
Regarding the CBE's monetary policy, the IMF found it remains appropriate to ensure that second round effects of food price volatility do not spill over into broader inflation, anticipating that if supply-side constraints are duly addressed to ensure more efficient functioning of market mechanisms, and prudent monetary policy maintained, inflation would be expected to reach single digits in 2020. A decline in inflation does not mean lower prices, but rather a slower pace of price increases.
The unemployment rate, according to the IMF's review, has declined from 12 percent in FY 2016/17 to around eight percent in December 2018, which is the lowest in 20 years thanks to efforts Egyptian authorities made to increase job opportunities for youth and promote women's participation in the labour force. But more reforms are needed to increase the dynamism of the private sector and boost investment and growth, which are critical for sustaining the declining trend of unemployment.

Clic here to read the story from its source.