S\u00e3o Paulo \u2013 Egypt has begun to reap the benefits of its economic reform program, according to Subir Lall, assistant director of the International Monetary Fund (IMF), who headed a staff mission to the Arab country between May 2 to 17.<\/p>\n
\u201cWhile the process has required sacrifices in the short-term, the reforms were critical to stabilize the economy and lay the foundation for strong and sustained growth that will improve living standards for all Egyptians,\u201d said Lall. His assessment is at the preliminary report of the third review of the country\u2019s reform program, which is supported by the IMF.<\/p>\n
An agreement between the Fund and Egypt, signed at the end of 2016, established the disbursement of USD 12 billion throughout a three-year period \u2013 in return to measures to improve the local economic situation. The staff team that visited the country this week approved the disbursement of USD 2 billion, bringing total disbursements under the program to USD 8 billion. The latest disbursement is yet to be approved by the IMF\u2019s Executive Board.<\/p>\n
According to the report, the growth of the Egyptian economy has accelerated, and the current account deficit has declined, as a reflex of the recovery of tourism and strong growth of remittances. Investment inflow also benefitted from the improvement in investors\u2019 confidence.<\/p>\n
Foreign exchange reserves stood at USD 44 billion at the end of April, equal to 7 months of imports. \u201cAnnual headline inflation has declined from 33% in mid-2017 to around 13% in April, anchored by the well-calibrated monetary policy of the Central Bank Egypt (CBE),\u201d states the report.<\/p>\n
Lall says that Egypt is heading towards a primary surplus. According to him, the government is committed to take forward the reforms to energy subsidies and increase in revenues, via tax policy reforms. \u201cThis will help create fiscal space for important infrastructure projects, targeted social protection measures and essential spending on health and education,\u201d it states.<\/p>\n
The report highlights actions implemented by the government in the social area for the protection of those most vulnerable, such as the supply of school meals to children, the expansion of childcare centers and initiatives to increase the participation of women in the labor market.<\/p>\n
Translated by S\u00e9rgio Kakitani <\/strong><\/p>\n