The Egyptian authorities and International Monetary Fund (IMF) are in close discussions on the policies needed to contain the economic impacts of the coronavirus (COVID-19). The statement was made by Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, told Daily News Egypt in teleconference on Wednesday.
Azour said, “We’re in direct communication with the Central Bank of Egypt, Ministry of Finance and other Egyptian Ministries to give the technical advice on the measures that the state need to take this period.”
Egypt’s economic reform programme, implemented in coordination with the IMF between 2016 and 2019, strengthened its financial position. This was particularly against shocks, with the programme, also helping the authorities to deal with the current health crisis as well, Azour said.
Egypt’s pre-coronavirus GDP growth was about 5.5%, with solid foreign exchange reserves, and a stronger banking system, Azour added.
He noted that Egypt is like many countries across the Middle East and North Africa (MENA) region, where economic activity suffered due to the coronavirus crisis. At the same time, the government put in place a range of measures to support the affected sectors in a very short time.
Middle East and Central Asia region countries have been hit by two large and reverberatting shocks, resulting in significantly weaker growth projections in 2020, Azour said.
He added that the coronavirus pandemic and the plunge in oil prices are causing economic turmoil across the region. Fragile, conflict affected states are particularly hard-hit, given the already large humanitarian and refugee challenges, and weak health infrastructures.
The immediate priority for policies is to save lives with required health spending, regardless of fiscal space. At the same time, they should preserve growth engines with targeted support to households and hard-hit sectors, he mentioned.
The IMF has been providing emergency assistance to help countries across the region during these challenging times, Azour said.
He added that economic recoveries should be supported with broad fiscal and monetary measures where policy space is available, and by seeking external assistance where space is limited.