Tue, 16 Feb 2021 - 12:30 GMT
FILE - International Monetary Fund (IMF)
CAIRO - 16 February 2021: The Ministry of Planning and Economic Development showcased in a statement Tuesday the views of the International Monetary Fund (IMF) and the Institute of International Finance (IIF) on the economic performance of Egypt so as both reports were welcomed by Minister Hala El-said.
The IFF report indicated that Egypt had adapted well to the consequences of the Coronavirus, with the support of an effective and timely response from the public healthcare sector, and the implementation of a bundle of financial and monetary measures.
The IMF report also praised the policies of the Central Bank of Egypt (CBE) and the Egyptian government.
"The IMF indicated in its report that Egypt has taken good steps that include expanding the provision of social support, providing credit to companies, and setting up plans to protect them against bankruptcy and job loss," El-Said stated.
The IIF report indicated that Egypt is the only country in the Middle East and North Africa region that did not endure recession in 2020.
The institute expects that growth will be supported by appropriate fiscal and monetary policies, and progress in reforms embarked on since 2016.
The IIF also estimates that partial closures and other restrictions may have a less significant economic impact during the second half of the current fiscal year, with consumers and companies finding ways to adapt and benefit from the great development in digital transformation and financial technology.
The IIF's report added that the status quo of the current monetary policy is appropriate and that there is room for further monetary easing based on the absence of inflationary pressures. The policy is also aligned with the central bank's target to set interest rates at 5-9% by the end of the fourth quarter of 2022. In addition, the debt-to-GDP ratio growth declined by 21% by the end of December on year-on-year basis proving that the banking sector has been well prepared to face the shock of Coronavirus.
Regarding the International Finance Institute's expectations for the Egyptian economy indicators, the institute expected the real growth of the economy to reach 4.7% in 2022, and 5.1% in 2024.
The report also referred to the authorities' expansion of the social protection program, with a focus on healthcare, supporting the most vulnerable groups by expanding the monetary subsidies program "Takaful and Karama", reducing electricity tariffs for the industrial and tourism sectors, and postponing taxes on capital gains until further notice.
In its report, the institute praised the development in the field of digital transformation, as it may lead to improved competitiveness and increased productivity of labor and capital, particularly that the pandemic raised the demand for electronic commerce.
The report highlighted that Egypt has made progress in the sector of communications and information technology by injecting large investments in rebuilding capacities, training programs, digital services, and infrastructure challenges.
The IMF report recommended the Egyptian government to maintain social support while setting priorities pointing out that economic reforms made Egypt stronger in the face of the Corona crisis. It also affirmed that the international institution will continue backing the Egyptian government through the crisis.