Egypt directs LE 26B to develop Upper Egypt in 2018/19

CAIRO – 6 May 2018: Egypt directed around LE 26 billion ($1.47 billion) of the government’s investments in the new fiscal year 2018/2019 to develop Upper Egypt’s governorates, Planning Minister Hala al-Saeed said.

This came during the “Inclusive Growth and Job Creation Conference” organized by the International Monetary Fund (IMF), in cooperation with the government and the Central Bank of Egypt.

The minister also added that about LE 3 billion are directed to develop North and South of Sinai Governorates.

Saeed stated that the Egyptian economy is now a job provider, stating that the average of the annual job opportunities reached 710,000 jobs in 2015/2016 and 2016/2017, which contributed in reducing the unemployment rate to 11.3 percent in the second quarter of 2017/2018.

She expected the unemployment rate to continue to decrease gradually to record 10.4 percent during the fiscal year 2018/2019 and to achieve 8.5 percent by 2021/2022.

The Egyptian economy is now pushed by the investment rate instead of the consumption rate which is reflected on the growth rate to record 5.3 percent in the second quarter of 2017/2018, reaching the highest Egyptian growth rate since 2008/2009, the minister added.

Saeed said that Egypt’s growth rate pushed the government and international organizations to raise their expectations of the economic growth to 5.3 percent currently from 4.6 percent in 2017/2018 before implementing the reform program.

She added that Egypt is targeting a growth rate of 5.8 percent, to be accelerated gradually to 8 percent by 2021/2022.

The IMF expected earlier that Egypt will record a GDP of 5.2 percent in the current fiscal year and to reach 5.5 percent next year, with an increase of 0.7 percent and 0.2 percent, respectively.

The IMF further anticipated the GDP to record 6 percent in 2023.

The IMF delegation arrived in Egypt this week to review Egypt’s progress on economic reforms, before it disperses the fourth tranche of the $12 billion loan deal.

The IMF’s executive board approved in November 2016 a three-year Extended Fund Facility (EFT) loan to Egypt worth $12 billion to support its economic reform program.

Egypt floated its currency in November 2016; losing 50 percent of its value, as part of the economic reform program.

Egypt had embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, all with the aim of trimming the budget deficit.