Macroeconomic stabilisation efforts have continued, and the Egyptian economy is showing signs of robust growth, Vladkova Hollar, who led an IMF team to Cairo, said in a statement after the discussions ended.
Economic activity in the country picked up to 4.4 per cent in fiscal 2024-25, and the balance of payments has improved markedly, despite adverse external developments. Recent efforts to improve trade facilitation and streamlining tax related procedures have been welcomed by the private sector, the statement noted.
The IMF and Egypt recently reached a staff-level agreement on the fifth and sixth reviews under the Extended Fund Facility (EFF) arrangement and the first review under the Resilience and Sustainability Facility (RSF).
The Egyptian economy is showing signs of robust growth and the balance of payments has improved markedly, despite adverse external developments, the IMF noted.
A tight monetary policy stance has helped place inflation on a declining path, while fiscal discipline was supported by strong tax revenue performance.
Fiscal policy needs to continue to reduce debt, while safeguarding and prioritising social spending to protect vulnerable groups, the IMF suggested. Structural reforms need to be accelerated, especially those associated with the role of the state, the divestment programme and leveling the playing field.
The country’s tax-to-gross domestic product (GDP) ratio remained at modest levels by international standards in FY25—12.2 per cent of GDP. Thus, continued efforts are needed to close the tax-to-GDP gap and place gross budget sector debt on a firm downward path while safeguarding targeted social spending, the IMF recommended.
“The large presence of state-owned banks in the financial system requires continued robust governance practices to maintain financial health, strengthen a market-based transmission mechanism for monetary policy, and promote competition in the banking sector,” it added.
Fibre2Fashion News Desk (DS)