This week the International Monetary Fund’s (IMF) Executive Board approved the release of a fourth $2 billion installment in Egypt’s Extended Fund Facility.
In approving the tranche, David Lipton, First Deputy Managing Director and Acting Chair, said, “The economic situation has continued to improve during 2018…The near‑term growth outlook is favorable, supported by a recovery in tourism and rising natural gas production, while the current account deficit is expected to remain below 3 percent of GDP and the public debt ratio to decline markedly by 2023.”
Read more about Egypt’s economic recovery in this week’s email, including other news you may have missed in the last week about Egypt, the Egypt-U.S. partnership, and other relevant issues. In this round-up:
- Egypt’s Prime Minister Delivers Government Policy Statement
- IMF Hails Egypt’s Improving Economy, Economic Reforms
- Operation Sinai Demonstrates Continued Progress
- World Bank Praises Economic Reform Achievements, Supports Egypt’s Plan to Become a Regional Energy Hub
- Finance Ministry to Implement Biggest Budget in Egyptian History
We hope you enjoy. Please let us know if the Embassy can be a resource.
Embassy of Egypt
EGYPT’S PRIME MINISTER DELIVERS GOVERNMENT POLICY STATEMENT
On Tuesday, 3 July, Prime Minister Mostafa Madbouly delivered to Parliament the policy statement for Egypt’s newly-formed government. Mandated by Egypt’s 2014 Constitution, the policy statement identifies policy priorities for the new government as it begins its work. In his address, Prime Minister Madbouly identified five main priorities for Egypt through 2030, including “national security, improving living standards, continuing economic reform, human development and foreign policy,” according to Ahram Online. Prime Minister Madbouly also told Parliament that Egypt’s reform program is 85% complete, saying, “The Egyptian citizen will feel a tangible improvement,” as a result of the reforms.
IMF HAILS EGYPT’S IMPROVING ECONOMY, ECONOMIC REFORMS
On Friday, 29 June, the International Monetary Fund (IMF) Executive Board approved the release of the fourth installment of a $12 billion Extended Fund Facility (EFF) and praised Egypt’s economy and ongoing economic reform program. According to a statement released by the IMF, David Lipton, First Deputy Managing Director and Acting Chair, said, “The economic situation has continued to improve during 2018. Strong program implementation and generally positive performance has been instrumental in achieving macroeconomic stabilization, with external and fiscal deficits narrowing, inflation and unemployment declining, and growth accelerating. The near‑term growth outlook is favorable, supported by a recovery in tourism and rising natural gas production, while the current account deficit is expected to remain below 3 percent of GDP and the public debt ratio to decline markedly by 2023.” In November 2016, the Executive Board of the IMF approved financial assistance for Egypt in the form of an EFF arrangement worth USD $12 billion, phased in over three years. The latest installment is worth $2.02 billion and brings the total received from the IMF to approximately $8 billion.
OPERATION SINAI DEMONSTRATES CONTINUED PROGRESS
On Tuesday, 3 July, the General Command of the Armed Forces issued a 25th communiqué highlighting continued progress of Operation Sinai 2018. According to Ahram Online, Egyptian Armed Forces reported that the operations in central and north Sinai have resulted in the destruction of 285 hideouts, a storage depot and 12 vehicles used by terrorists in attacking security posts. In addition, a number of tunnels were destroyed in Rafah and 59 terrorist suspects were arrested. The communiqué emphasized that these developments come as part “of the sacrifices rendered by the men of the armed forces and the police in chasing and routing the terrorist elements, and to buttress the capacity to secure land and sea borders in all strategic directions.” Operation Sinai 2018 was launched in February 2018 to fight terrorism in North and Central Sinai, other areas in the Nile Delta and the desert areas west of the Nile Valley.
WORLD BANK PRAISES ECONOMIC REFORM ACHIEVEMENTS, SUPPORTS EGYPT’S PLAN TO BECOME A REGIONAL ENERGY HUB
On Monday, 2 July, Executive Director and Dean of the Board of Executive Directors of the World Bank Merza Hussain Hasan praised Egypt’s economic reform achievements. While meeting with Prime Minister Mostafa Madbouly, Hasan said that the improvement of Egypt’s economic performance indicators reflects the efforts exerted by the government. Hasan also met with Minister of Petroleum and Mineral Wealth Tarek El Molla during his visit to Cairo. According to a statement released by the Ministry of Petroleum, as reported by Ahram Online, Hasan said he was visiting in full support of Egypt’s project to become a regional energy hub, with the World Bank financing infrastructure and providing technical support, while highlighting the importance of the project for Egypt’s energy security and its economic and political relations with all involved countries.
FINANCE MINISTRY TO IMPLEMENT BIGGEST BUDGET IN EGYPTIAN HISTORY
Finance Minister Mohamed Maeet announced this week that biggest state budget in Egyptian history has begun implementation for Fiscal Year 2018/2019. According to the State Information Service (SIS), Maeet said that expenditures in the new budget are estimated at EGP 1.4 trillion (approximately USD $80 billion), an EGP 200 billion increase from the 2017/2018 budget, with funds allocated to education and health earmarked at an unprecedented EGP 257 billion (USD $15 billion). This week, the Central Bank of Egypt also announced that Egypt’s foreign reserves rose to $44.258 billion at the end of June 2018, an increase over the previous month record figure.