The International Monetary Fund (IMF) on Tuesday said Egypt needs to make decisive progress on fiscal and structural reform if it wants to get a new round of support from the fund, reported The Reuters.
In an evaluation of a $5.2 billion stand-by arrangement agreed with Egypt in 2020, the IMF’s executive board noted Egypt’s high public debt burden and large gross financing requirements.
“Decisive progress on deeper fiscal and structural reforms is needed to boost the economy’s competitiveness, improve governance, and strengthen its resilience against shocks,” the IMF board said in a statement.
The statement called for reforms fostering private sector development and reducing the role of the state. It added that the board’s evaluation “should inform the ongoing discussions on the Fund’s future engagement with Egypt.”
Earlier this month, the IMF said it was continuing discussions with the Egypt government aimed at agreeing an extended fund facility that would support the government’s economic policies and reforms. The monetary body announced that Egypt had made a request for a new programme in March as the country came under new financial pressure due to economic fallout from the war in Ukraine.
In related news, in an update of its World Economic Outlook, the IMF estimated the global real GDP growth to drop to 3.2 per cent in 2022 from a forecast of 3.6 per cent issued in April. It added that world GDP actually contracted in the second quarter due to downturns in China and Russia.
The IMF warned that the United States has only a slim chance of avoiding an economic downturn given the many risks it faces.
“It’s a very narrow path,” IMF chief economist Pierre-Olivier Gourinchas said.
He added that the current environment suggests the chances that the U.S. economy can avoid a recession is actually quite narrow. He warned that even a small shock could tip the U.S. economy into recession.
