Egyptian economy improved over last year, price hike temporary: IMF mission

CAIRO – 1 November 2018: Head of the International Monetary Fund's mission in Egypt, Subir Lall, said Wednesday, Oct. 31 that the price increase is not proof of a weak economy, adding that the economic resilience is a sign of strength.

In an interview with "Yahdoth fi Misr" on MBC Masr, the IMF official said that the Egyptian economy improved over the last year, referring to the decrease in the country's trade deficit, the increase in exports, the decrease in imports, and the lower rate of inflation.

Lall explained that there was a temporary rise in prices taking place besides the permanent rise. He said that the IMF aims to help Egypt reduce prices during the next period, stressing that the Egyptian economic situation is not bad, as all countries are clearly suffering a rise and change in prices.

Addressing the recent crisis in the country concerning an increase in potatoe price, Lall said that the IMF had discussed the issue with the Egyptian Agriculture Ministry, adding that the lack of government control over markets can be behind the increase.



He also referred to the high prices of vegetables and fruit in Egypt during the recent period, saying that such rise is temporary, and will be eliminated by next year.

Praising government efforts, Lall said that the Egyptian government is working seriously to achieve remarkable economic reform, adding that the target of the reform program is to achieve a budget surplus, in order to reduce public debt.



Lall said that the IMF holds discussions with the Egyptian governmental institutions including the Central Bank, the Finance Ministry and the Ministry of Social Solidarity every six months to produce a report on the economic reform program.

Based on these discussions, the policies of the reform program can be determined, with the aim of achieving economic progress, so as to create more jobs, and benefit those who are in need of social assistance, Lall said.

He added that a report is sent to the Executive Board of the IMF, explaining that once this report is discussed, financial aid is transferred, following the completion of the audit.
The IMF official revealed that the fourth review of the economic reform program is under way, stressing that a $2 billion loan will be transferred to Egypt, once the Executive Board approves it.

The Egyptian government should seek to increase investments in the private sector in order to create more job opportunities, Lall said, adding that Egypt needs to create 700,000 jobs every year to employ young people.