Christine Lagarde, managing director of the International Monetary Fund (IMF), met on Thursday with Egypt's President Abdel Fattah El-Sisi during his current visit to Washington. The two sides discussed the progress of Egypt's economic reform program, supported by the IMF's $12bn loan for three years. The reform program focuses on decreasing the country's fiscal deficits and government debt levels, as well as attracting foreign exchange liquidity which will help Egypt to solve its credit challenges. The Egyptian government seeks to decrease its fiscal deficit to 10% of its GDP in fiscal year 2017/2018 and 6.1% in 2019—down from 12.6% in 2016. One of the initial steps of the economic reform program was the liberation of Egypt's local exchange, which led to a significant jump in US dollar price recording about EGP 18 compared to EGP 8.88 before the Central Bank of Egypt's (CBE) flotation decision on 3 November 2016. The devaluation of the Egyptian pound increased the deficit rate due to the high demand for imports, compared to exports. Egypt's program also depends on social protection through improving the efficiency of the country's subsidy system, such as reducing petroleum and electricity subsidies, and creating a safety net for the poor. In addition, the government vowed to carry out a wide structural reform, which would fight bureaucracy and corruption in the state authorities. IMF's Lagarde asserted that Egypt is implementing a strong economic reform to help the economy return to its full potential, achieve more growth, and create more jobs. She appreciated the sacrifices made and the difficulties faced by many Egyptian citizens, especially due to high inflation. Lagarde pointed out that the IMF is working to help the government and the CBE to bring inflation under control and support the Egyptian authorities in their efforts to protect the most vulnerable citizens.
