The World Bank said on Saturday that the liberalisation of the Egyptian pound and an increase in energy prices will help Egypt create jobs and revive the economy.
The Central Bank of Egypt (CBE) decided on Thursday to liberalise the national currency’s exchange rate and leave its value to the mechanisms of supply and demand. The CBE also raised the basic interest rate to 3%.
On Friday morning, the government raised the prices of petroleum products at rates ranging between 7.1% and 87.5%, including gasoline, diesel, natural gas for both cars and homes, as well as the prices of liquefied petroleum gas cylinders and fuel oil for factories.
The World Bank praised, in a statement, the economic and social reform measures recently taken by the Egyptian government, especially the flotation of the Egyptian pound, the promotion of investment, particularly in Upper Egypt, the adjustment of energy prices to reflect market conditions, and the strengthening of social safety nets.
Moreover, the World Bank said that the package of reforms announced by the government would help create jobs and revitalise the economy. They would boost the competitiveness of Egyptian businesses, support export growth, attract new foreign investment, free public resources for priority growth and social programmes, and support incomes for the poor and the vulnerable.
Asad Alam, World Bank country director for Egypt, described Egypt’s latest decisions as an ambitious programme of reforms with a strong focus on job creation and social measures to support the incomes of the poor and the vulnerable.
“We are pleased to support the government’s social protection efforts, especially in the expansion of the Takaful programme which already reaches about 4.5 million people in extreme poverty, new investments for job creation in Upper Egypt, as well as through labour-intensive works for youth and women,” he added.