IMF国际货币组织全球-Arab-Republic-of-Egypt_Fifth-Review-Under-the-Extended-Arrangement-Under-the-Extended-Fund-Facility_69页_1mb

Summary of IMF Country Report No. 19/311 for Egypt

Core Content

The Fifth Review Under the Extended Arrangement Under the Extended Fund Facility (EFF) for Egypt was completed on July 24, 2019, allowing the country to draw SDR 1,432.76 million (about US$2 billion). This brings total disbursements to SDR 8,596.57 million (about US$11.9 billion or 422 percent of quota), the full amount approved in November 2016. The review highlights Egypt's progress in macroeconomic stabilization, structural reforms, and the achievement of key program targets.

Main Objectives and Outcomes

• Macro-economic stabilization: The program has been successful in correcting external and domestic imbalances, stabilizing the economy, and reducing public debt.
• Growth and employment recovery: Real GDP growth has increased, and unemployment has declined to 8.1 percent in early 2019, the lowest in over a decade.
• Public debt reduction: The primary surplus target of 2 percent of GDP was met, contributing to a declining public debt-to-GDP ratio.
• Exchange rate flexibility: The Egyptian pound appreciated by 8 percent against the U.S. dollar since the start of 2019, reflecting improved macroeconomic conditions and increased portfolio inflows.
• Structural reforms: Reforms in competition policy, public procurement, industrial land allocation, and state-owned enterprises (SOEs) were initiated, though progress has been uneven.

Key Views and Information

Macroeconomic Performance

• Real GDP growth was 5.4 percent in the first half of 2018/19, driven by natural gas, tourism, and construction.
• Consumer prices decreased from 29.8 percent in 2016/17 to 7.4 percent in 2020/21, with core inflation remaining stable at around 8 percent.
• The current account deficit is expected to remain at 2.6 percent of GDP in 2018/19, but Egypt has become a net exporter of oil and gas.
• Gross general government debt is projected to decline from 93 percent of GDP in 2017/18 to 85 percent by end-June 2019.

Fiscal Policy

• The budget sector is on track to achieve a primary surplus of 2 percent of GDP in 2018/19, meeting the program target.
• Fuel subsidy reform was completed, reducing the impact of oil price volatility and freeing up fiscal space for social spending.
• Revenue mobilization has improved, helping to support the fiscal surplus.

Structural Reforms

• Key reforms include competition policy, public procurement, industrial land allocation, and SOE governance.
• Missed benchmarks: Some structural reforms were delayed or only partially implemented, including fuel price indexation, NIB restructuring, and the introduction of a market-based mechanism for industrial land allocation.
• Reforms in progress: The National Investment Bank (NIB) is being restructured, and an international auditor has been hired to evaluate its financial position.
• The e-Procurement portal and reforms in SOE procurement rules were launched.

Risks and Outlook

• The main risks include a shift in global financial conditions and a weakening of reform momentum.
• Unemployment is expected to return to double digits if real GDP growth slows to the 2006–2015 average of 4 percent.
• Non-price competitiveness remains a challenge, as non-oil and gas exports are still low at 6 percent of GDP.
• External debt is expected to decline from 41.3 percent of GDP in 2016/17 to 29.2 percent in 2020/21.

Policy Discussions

• Monetary policy: The Central Bank of Egypt (CBE) is focused on bringing inflation to single digits, with a flexible exchange rate to improve resilience to shocks.
• Exchange rate flexibility: The CBE has increased its focus on market-based operations, and the overdraft facility with the government has been brought below statutory limits.
• Interest rate policy: The CBE plans to move toward an interest rate-based monetary policy framework in the medium term, with the draft Banking Law being discussed in Parliament in October 2019.
• Fiscal policy: Continued fiscal consolidation is essential to maintain the downward trajectory of public debt and to support inclusive growth.

Conclusion

The IMF staff supports the completion of the fifth review under the EFF arrangement, recognizing Egypt's progress in macroeconomic stabilization, structural reforms, and debt sustainability. However, sustained implementation of reforms is necessary to maintain the positive outlook for growth and employment. The favorable near-term outlook provides an opportunity to further advance structural reforms and improve the business climate for the private sector.

Key Documents and Contact Information

• Press Release No. 19/300
• Staff Report
• Statement by the Executive Director
• Letter of Intent
• Technical Memorandum of Understanding

Copies of this report are available from:

• International Monetary Fund • Publication Services
• PO Box 92780 • Washington, D.C. 20090
• Telephone: (202) 623-7430
• Fax: (202) 623-7201
• E-mail: publications@imf.org
• Web: http://www.imf.org
• Price: $18.00 per printed copy

Summary of Key Indicators

Main Takeaways

• Egypt has successfully completed its three-year EFF arrangement.
• Macro-economic stabilization has been achieved, with inflation and unemployment declining.
• Structural reforms have been initiated, but implementation has been uneven.
• Fiscal consolidation is on track, supported by fuel subsidy reform.
• Exchange rate flexibility and monetary policy are crucial to sustaining growth and reducing public debt.
• The positive outlook depends on continued reform efforts and sound macroeconomic policies.