International Monetary Fund (IMF) Managing Director Christine Lagarde has sent a letter to Egyptian President Abdel Fattah Al-Sisi praising economic reform measures by the government regarding economic legislations, a presidential statement Saturday showed.
Within her letter, Lagarde stated that the IMF is ready to support Egypt “with all possible ways”, according to the presidency statement.
Lagarde also expressed her pleasure in attending the recent Economic Summit held in Sharm El-Sheikh, noting its success in attracting business agreements and economic contributions from Arab countries.
In a February report on Egypt, the IMF said the country’s authorities have started implementing policies to create growth and employment, as well as restore macroeconomic stability.
“Egypt is vulnerable to adverse global economic developments, regional security risks, domestic shocks and possible policy slippages, but upside risks could also materialise from a successful implementation of the authorities’ policies and reforms,” the report showed.
For the first time after the 25 January Revolution, the IMF mission visited Egypt in November to consult on Article IV of IMF guidelines. It also sought to discuss recent economic reforms by the government, which most notably include amendments to the energy subsidies and tax system.
According to the latest IMF report on Egypt, the local political uncertainties have affected tourism and capital flows. Meanwhile, the banking system has been resilient to the shocks and has maintained profitability, low non-performing loans and high liquidity.
The IMF added that the anticipated growth of GDP by 3.8% in fiscal year (FY) 2014/2015 would create jobs and reduce unemployment. This would be thanks to the economic measures implemented so far, alongside some recovery in confidence.
Fiscal consolidation will reduce the budget deficit to be less than 8% of GDP by FY 2018/2019, the IMF added.