Egypt, IMF reach agreement on new economic reform program

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The Central Bank of Egypt (CBE) and Ministry of Finance have reached an agreement with the International Monetary Fund (IMF) on the policies and restructuring of the new Egyptian economic reform program, according to an official statement by the finance ministry on October 16th.

The program to be backed by the IMF will cover three key factors embodied in the reforms and arrangements related to the fiscal and monetary policies, as well as restricting amendments to the Egyptian economy, the Egyptian authorities announced on the sidelines of their meetings with the IMF’s experts in Washington.

Egypt targets maintaining financial discipline efforts to achieve an annual primary surplus to cut government debts to below 80% of gross domestic product (GDP) in the medium term, the statement highlighted.

Moreover, the Egyptian government is working on extending the term of government debt, diversifying sources of financing, and improving the efficiency of revenues and spending under the general budget.

The government is also expanding in financing the social protection programs, especially the ones targeting raising wages of workers and higher allocations for insurance and pensions, which benefit more than 10 million individuals and households.

Furthermore, the government is seeking to continue financing Takaful and Karama program as well as Hayah Karema.

On October 15th, the IMF’s Director of Communications Gerry Rice revealed in a statement that Egyptian authorities and the staff of the IMF agreed to finalize their negotiations in preparation for reaching a staff-level agreement very soon.

The IMF’s staff and the Egyptian team have made “substantial progress” regarding all policies, Rice added.