Egypt finalizes agreement with IMF at level of experts, announcement "very soon"

CAIRO - 16 October 2022: The agreement with the International Monetary Fund (IMF) at the expert level on the components of the new program has been finalized, and an announcement will be made “very soon”, Minister of Finance, Mohamed Maait stated Sunday.

 

Maait explained that very fruitful bilateral discussions were held with IMF experts on the sidelines of the annual meetings of the IMF and the World Bank in Washington, and significant progress was made in all policies.

 

“We are continuing efforts to control the state's public finances; to preserve the economic gains, by sustaining the reduction of public debt rates to the gross domestic product (GDP) in the medium term, especially since we succeeded during the last fiscal year in recording positive indicators despite the inflationary pressures and uncertainty in the global arena,” he said.

 

According to the minister, Egypt was one of the few emerging economies that achieved a primary surplus in the last fiscal year 2021/2022 of 1.3 percent of GDP, a growth rate of 6.6 percent, an increase in tax revenues of about 19 percent on an annual basis, and a reduction in the budget deficit from 13 percent in 2012/2013 to 6.1 percent in the 2021/2022.

 

He added that the government targets to lower the budget deficit to 6 percent during the current fiscal year 2022/2023 and 4 percent by 2026/2027, and to reduce the debt rate from 103 percent in June 2016 to 87.2 percent in June 2022.

 

On Saturday, Director of Communications at the International Monetary Fund (IMF), Gerry Rice, said that the IMF staff and the Egyptian authorities “have held very productive in-person discussions on the margins of the IMF and World Bank Annual Meetings and made substantial progress on all policies. 

 

For his part, Deputy Minister of Finance for Fiscal Policies and Institutional Development, Ahmed Kojak, said that the state opens its doors to local and foreign investments to achieve comprehensive and sustainable development; in light of working on issuing the “State Ownership Policy” document.

 

Kojak elaborated that the document is a real guarantee and an effective strategy to empower the private sector, deepen its participation in economic activity, and send a message of reassurance to local and foreign investors, enhancing the confidence of international institutions in the Egyptian economy, as the government plans to exit from 79 sectors and reduce its investments in 45 other sectors.

 

“We are continuing to strengthen efforts to move towards a green economy, as we are working to attract environmentally friendly investments, such as: "manufacturing electric or natural gas-powered cars, solar energy, green hydrogen, desalinating sea water, and generating energy from wind”, in a way that contributes Improving Egypt’s competitiveness with the Environmental Performance Index by increasing the proportion of government-funded green public investments to 50 percent by 2025,” he added.

 

He stressed that the government is keen to diversify the sources and tools of financing between the issuance of green bonds, samurai bonds, and panda bonds, and it also aims to issue sustainable development bonds with a social dimension.