IMF’s Georgieva says pace of state projects may affect Egypt’s macroeconomic stability

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva suggested that Egypt may need to slow down the pace of its projects in order to protect its macroeconomic stability in a press conference on the sidelines of the IMF's and World Bank's spring meeting.

Georgieva explained that Egypt, like so many IMF members, has experienced extraordinary pressures due to recent shocks.

The IMF head added that the fund and Egypt have agreed on a “sound program that has three critical elements,” which include implementing a more flexible exchange rate, as well as boosting the private sector and increasing its role in the economy.

She stated that the final pillar was on moderating long-term investment projects, highlighting that while these projects are “very important and very good for Egypt,” maintaining the same pace planned under different circumstances could undermine the country’s macroeconomic stability.  

Egypt is preparing for a review of its $3 billion IMF loan in order to receive its second tranche under the Extended Fund Facility (EFF), however, Egypt and the IMF have yet to agree on a review date.

“We are now preparing to carry out the review. The teams are working, and I am confident that we would have a good outcome. I want to say that we have seen in Egypt a deeper understanding of the complexity of both the domestic and global environments,” noted Georgieva during her press conference.