The International Monetary Fund had “good discussions” with Egyptian officials in Washington last month and will send a technical assistance team to Cairo early June, Director of the Middle East and Central Asia Department at IMF, Masoud Ahmed said Tuesday.
The economic policy reforms pursued by the Egyptian government have started to pay off and growth is enhanced, although the country still facing difficult situation, he noted in a statement on Tuesday to Reuters.
Regarding the visit, IMF Mission Chief for Egypt Chris Jarvis told Daily News Egypt that IMF staff visits are routine visits to member countries, and are part of the IMF surveillance and policy consultation relations with the Egyptian authorities.
“We are not in talks on a new programme or a loan. So far, the authorities have not requested IMF financing, but we would be ready to consider a request if the authorities feel it is opportune. As mentioned by the Managing Director more than once, the Fund stands ready to help Egypt and its people,” Jarvis added.
In response to a question about expectations of Egypt’s current account deficit, Jarvis told Daily News Egypt that they “expect imports to increase as growth recovers”. Further, they are expecting Egypt to “remain a net oil and gas importer; this also weighs on the current account balance. Therefore, to reduce the current account deficit, Egypt would need to export more”.
As for recommendations to the Egyptian government to avoid current account deficit, Jarvis said that “the authorities have put together a plan that seeks to achieve fiscal consolidation over the medium term. If fully implemented, this plan will help by reducing the demand for imports arising from the public sector. In particular, the energy subsidies reform will help reduce consumption of petroleum products”.
In another context, economic analyst Fakhry Al-Feky commented that it is still too early to talk about requesting loans from the IMF, as the government still has no clear economic reform programme, noting that the government is making efforts to resolve many internal issues, such as food and energy supplies.
The government also has other economic packages to help reduce the financing gap, such as the recent $6bn deposits from Gulf countries, and the $6bn more expected, and the $4.8bn from the World Bank over five years, Al-Feky added.
Source: Daily News Egypt
