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A year since pound flotation, what's next for Egyptian economy? Flotation improved Egypt's FX reserves, exports, and FDI, yet inflation remains a challenge
Friday, November 3, will mark a year since Egyptian authorities adopted the ambitious economic reform programme, which aims to revive the ailing economy and boosting growth, correcting the structural issues, in order to create new job opportunities, and improve living standards of the average Egyptians. Since the start of the economic reforms, authorities introduced the value-added tax law (VAT), decided to free-floating the Egyptian pound, raised the price of subsidised fuel, and went on a borrowing spree from the International Monetary Fund (IMF), the World Bank, China, and others to finance its ambitious programme. Such decisions carried positive impacts such as increasing the foreign currency reserves to reach $36.5bn in September 2017 to exceed its pre-revolution levels, growth of foreign direct investments(FDI) to register at $7.9bn in fiscal year (FY) 2016/17, rise of the exports by 15.8% from FY2015/16 levels to account for $21.6bn in FY 2016/17. However, the reforms had some negative consequences as well, such as the rise of Egypt's external debt to register at 44% of GDP in June 2017 from 15.9% of the GDP in June 2010, and the inflation which sky-rocketed to unprecedented levels, scoring 35% by the end of July 2017. Daily News Egypt covered these indicators in depth in Pages from 3-7
