IMF Egypt Review: Staff report updated macroeconomic projections

CAIRO – 26 September 2017: The International Monetary Fund (IMF) published Tuesday its staff report of their first review, including updated macroeconomic projections based on the recent developments of the Egyptian economy.

Egypt’s current account deficit is seen to improve to 4.6 percent of the GDP in the current fiscal year, and 3.8 percent in the next fiscal year, the IMF said.

“Improved competitiveness from depreciation and productivity gains from the reforms are expected to support exports and contain imports, while tourism is projected to recover as security conditions improve,” the IMF’s report stated.

Some economic indicators have gone far from the IMF’s expectations. The GDP growth rate for fiscal year 2017/18 and 2018/19 are forecasted to stand at 3.5 percent and 4.5 percent respectively “because of weaker than expected growth in the second half of 2016,”it said.

In July, the IMF approved the disbursement of the second tranche worth $1.25 billion of Egypt's $12 billion loan, following the IMF’s completion of its Executive Board for the first review of Egypt’s economic reform program supported by an arrangement under the Extended Fund Facility (EFF).

In November, Egypt received the first funding installment of $2.75 billion of the loan approved in favor of Egypt in 2016.

The international financial institution said the reforms' program aims to improve the functioning of the foreign exchange markets, bring down the budget deficit and government debt, and raise growth to create jobs, especially for women and youth.

It added that the program aims to protect the most vulnerable groups in society during the process of adjustment.