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27 August 12:00 AM

IMF review mission in Egypt within weeks to move on to 2nd stage of economic reform

International Monetary Fund (IMF) Director of the Middle East and Central Asia Department Jihad Azour said the IMF mission will visit Egypt within the coming few weeks to review the situation in Egypt, commending the progress realized so far in Egypt's economic reform program.

Addressing a press conference on the fringe of the IMF Annual Spring Meetings on Friday, Azour said Egypt has successfully accomplished the first stage of the economic reform program which aimed at realizing economic stability and it is time to move to the second stage which targets improving the investment climate and promoting the private sector's role.

The Egyptian government should start working on structural reforms to up growth rates in order to generate jobs, he said.

He noted that the Egyptian labor market absorbs about 700,000 youths annually.

Azour said the financial conditions in Egypt are getting better and this coincided with a rise in hard currency reserves, money inflow, recession in inflation rates and restoration of tourism and exportation rates.

He expounded that re-assessing subsidies allocated to energy contributed to allocating more funds for social programs and, hence, supporting most needy segments.

Azour hailed the successful measures adopted by the Central Bank of Egypt (CBE) to improve the monetary policy in line with the economic reform program.

The CBE measures managed to attain its goal of gradually downing inflation rate as it receded from 33% to 16% in less than a year and is expected to reach 13-14% by the end of the year.

Azour considered this drop in inflation rate as a great achievement.

The bank has also managed to reduce interest rates by 2% at a time when international markets were witnessing a rise in interest rates, he added.

He expounded that the drop in inflation rates would assuage the negative impact of shrinking  subsidies.

The economic reform measures have largely contributed to improving Egypt's credit rating.

He added that  restructuring the subsidies mechanism by the end of 2019 will help inject more money into more productive sectors.

He added that spending on subsidies is not economically effective as it serves people with high income.


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