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Egypt would have been unable to face COVID-19 without economic reform,: Songwe - Daily News Egypt

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Egypt would have been unable to face COVID-19 without economic reform,: Songwe

Government continues to implement integrated package of structural reforms to strengthen country’s macroeconomic structure, says Egypt’s Finance Minister

The Egyptian economy has been able to overcome the repercussions of the novel coronavirus (COVID-19) pandemic due to the country’s economic reforms, according to United Nations (UN) Under-Secretary-General Vera Songwe.

Songwe also praised the Egyptian experience in economic reform, which she connected with its improved flexibility. This allowed the local economy to mitigate the global pandemic’s severity and quickly contain the economic fall-out with preemptive measures.

During a video conference with Egypt’s Minister of Finance Mohamed Maait, Songwe said that the measures undertaken by Egypt have improved international confidence in the country’s economic resilience. She added that Egypt is widely considered to have one of the best emerging economies in the world.

Songwe presented a proposal to establish a special entity under the UN’s umbrella, which has the support of major countries, as well as regional and international financial institutions.

The entity would support countries negatively affected by the coronavirus pandemic, providing the guarantee or payment of financial obligations for these countries until their economies recover.

Maait affirmed the Egyptian government’s continued implementation of an integrated package of structural reforms to strengthen the country’s macroeconomic structure. The package is also set to raise Egypt’s medium-term economic growth rates by 5.5%, as Moody’s expected in its last report.

This would run alongside an expansion in Egypt’s export base, increase the country’s GDP, and reduce the budget deficit and public debt rates, to help preserve economic gains.

Maait added that the government adopted a preemptive policy in dealing with the pandemic. The political leadership took the initiative to allocate a financial support package worth 2% of Egypt’s GDP, to contribute to alleviating the shock of the pandemic, and support economic sectors.

“We support the proposals related to the funding of G20 countries and major African countries whose economies have been affected by inevitable repercussions of the epidemic,” the minister said,  “This will take place by studying the relief of their debt burdens, whether by rescheduling, delaying or exempting them.”

Maait added that this would take place in coordination with regional and international financial institutions, such as the Islamic Development Bank (IDB), the African Development Bank (ADB), the International Monetary Fund (IMF), and the World Bank. There will also be contributions from donors in major industrialised countries.”

Egypt supports the existence of a proposed entity to pay the financial obligations of countries negatively affected by the COVID-19 pandemic until they recover economically, Maait said.

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