IMF praises Egypt performance with Covid-19 pandemic
Thursday، 24 June 2021 - 01:40 PM
The Executive Board of the International Monetary Fund (IMF) completed the second and final review of Egypt’s economic reform program supported by a 12-month Stand-By Arrangement (SBA), allowing the authorities to draw SDR 1,158.04 million (about US$ 1.7billion.
This brings total purchases to SDR 3,763.64 million (about US$ 5.4 billion or 184.8 percent of quota), the IMF said in a statement on Thursday.
The IMF hailed the way the Egyptian government addressed Covid-19 pandemic.
Egypt responded to the Covid-19 crisis with timely and prudent fiscal and monetary easing, which helped mitigate the health and social impact while safeguarding economic stability, debt sustainability, and investor confidence
With remaining risks to the outlook stemming from global uncertainty and Egypt’s high public debt and gross financing needs, near-term fiscal and monetary policies should continue to support the recovery while continuing to preserve macroeconomic stability.
Deepening and broadening structural reforms will be essential to address post-pandemic challenges, strengthen buffers and unleash Egypt’s enormous growth potential with benefits for all Egyptians.
The arrangement was approved by the Executive Board on June 26, 2020 (Press Release No. 20/248) to support the authorities’ economic reform program during the Covid-19 crisis.
The program aimed to address balance of payments needs arising from the pandemic, support the authorities’ efforts to maintain macroeconomic stability while preserving achievements made over the prior years, and advance key structural reforms.
Egypt entered the Covid-19 crisis with sizable buffers, thanks to reforms implemented since 2016. Faced with unprecedented domestic and global uncertainty, the authorities’ policies struck a balance between ensuring targeted spending to protect necessary health and social expenditures and preserving fiscal sustainability while rebuilding international reserves.
Growth is expected to reach 2.8 percent in FY2020/21 and rebound strongly to 5.2 percent in FY2021/22, but the outlook remains clouded by uncertainty while Egypt remains vulnerable to shocks due to its high public debt and gross financing needs.
The IMF will remain closely engaged with the Egyptian authorities and continue supporting their reform agenda.