Egypt prioritizes combating inflation, empowering private sector: Sisi to IMF’s Georgieva

CAIRO – 3 November 2024: President Abdel Fattah El-Sisi affirmed the Egyptian state’s priority in combating inflation and price hikes while continuing efforts to attract investments as he welcomed Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva in Egypt on Sunday.

During the meeting, Sisi emphasized that the state prioritizes alleviating the pressures and burdens on citizens, highlighting ongoing endeavors to empower the private sector to increase employment rates and growth, the Presidency said in a statement.

The meeting, attended by a high-level delegation from the IMF, as well as Egyptian prime minister, central bank governor, and ministers of economic development and finance, discussed progress on Egyptian economic reform program, conducted in partnership with the global lender.

 

COLLABORATION AMID CHALLENGES

President Sisi affirmed to Georgieva that Egypt looks forward to continuing cooperation with the IMF with the aim of enhancing economic stability and reducing inflation rates.

However, he noted the necessity of considering the scale of changes and challenges that Egypt has faced recently due to regional and global crises, which have significantly impacted dollar resources and budget revenues.

Georgieva, for her part, confirmed her full understanding of the significant challenges facing Egypt in light of regional and international developments, noting the IMF partnership with the Egyptian government in seeking the best reform paths that consider all pertinent dimensions.

She highlighted the IMF and the government keenness to preserve the outcomes of the reforms that have reflected positively on the Egyptian economy, especially in improving overall economic indicators and enhancing development efforts primarily driven by private sector growth.

 

Georgieva underscored that the IMF agrees with Egypt on the importance of further focusing on combating inflation and taking effective measures to limit it.

The IMF chief expressed her deep appreciation for the efforts of the Egyptian state during the recent period and the reform program being carefully implemented, with a focus on supporting the most vulnerable groups as a top priority.

Georgieva praised the progress made in the overall economic indicators despite the unprecedented challenges at present. She highlighted the positive outlook on Egypt by international credit rating agencies, as well as the elevation of the nation’s credit rating, and the growth of investments.

FOURTH REVIEW

The IMF chief is visiting Egypt ahead of a visit by an IMF mission in the next days to discuss the fourth review of the nation’s reform program.

Wonderful to return to Cairo! Looking forward to productive discussions with President @AlsisiOfficial, PM Madbouly and key stakeholders about maintaining Egypt's economic stability and fostering inclusive growth that will create opportunities for all Egyptians. pic.twitter.com/GeFa5buwo7

— Kristalina Georgieva (@KGeorgieva) November 2, 2024

In July, Egypt completed its third review of the 46-month loan program approved in 2022 and augmented this year, unlocking $820 million in support for the economy.

Last March, the IMF bolstered its loan to Egypt to $8 billion instead of $3 billion amid the consecutive challenges facing Egypt including the ongoing Israeli war in Gaza and subsequent dip in Suez Canal revenues.

With the signing of the loan augmentation deal, Egypt, which is emerging from an economic crisis and a foreign currency crunch endured over the recent years, has allowed its currency to trade freely.

The IMF package also unlocked additional funds from the World Bank and the European Union valued at billions of dollars.

Egypt, however, has long highlighted the negative impacts of the ongoing regional and global challenges on its economy, including on the revenues of the Suez Canal, a key sources of foreign currency to the country.

Amid the ongoing challenges, Egyptians have been complaining of huge hikes in commodity prices over the recent years with the country fighting high inflation rates.

REEVALUATING IMF PROGRAM

In October, President Sisi warned that the state may be forced to reevaluate the situation with the IMF if the ongoing challenges pose unbearable burden on the public.

President Abdel Fattah El-Sisi highlighted on Sunday Egypt’s program with the International Monetary Fund (IMF), noting that the country may “review the situation” with global lender if the ongoing challenges pose unbearable burden on the public.#Egypt #Business #Economy | #مصر… pic.twitter.com/aPgfT6WhUM

— Egypt Today Magazine (@EgyptTodayMag) October 21, 2024

Speaking at the 2024 Global Congress on Population, Health and Human Development hosted by the New Administrative Capital, east of Cairo, Sisi said Egypt has lost about $6-7 billion in the last 10 months amidst ongoing regional and global repercussions.

He added that these circumstances will potentially continue for another year.

“We are part of the world economy and the challenges facing the world must be put into consideration,” Sisi said.

“If the current challenge will push us in a way that the public cannot bear, we must reconsider the situation with the IMF,” Sisi stressed.

NEGOTIATING TIMELINE

Prime Minister Mostafa Madbouly stated in October that Egypt is planning to reevaluate its reform program’s timeline with the IMF with the country grappling with economic hurdles, including inflation and high debt.

“Based on the recent economic developments in Egypt, we will have the opportunity to negotiate this matter with the IMF mission to review the program," Madbouly stated.

Madbouly emphasized that despite the challenging circumstances, Egypt has maintained its commitments to the IMF, noting the government's success in reducing unemployment to its lowest levels in recent months, a sign of resilience amid ongoing economic pressures.