Experts at the International Monetary Fund (IMF) said the Stand-by Arrangement (SBA) with Egypt, offered during the period from June 2020-2021 has achieved its major targets in terms of maintaining the macro-economic stability during the coronavirus pandemic as well as helping advance key main structural reforms.
This came in reports published on Thursday night after the IMF Executive Board completed the second and final review of Egypt's economic reform program supported by a 12-month Stand-By Arrangement (SBA).
Faced with unprecedented domestic and global uncertainty, the Egyptian authorities' policies struck a balance between ensuring targeted spending to protect necessary health and social expenditures and preserving fiscal sustainability while rebuilding international reserves, according to the IMF experts.
MENA"The Egyptian authorities have managed well the economic and social impact of the COVID-19 pandemic. Proactive economic policies shielded the economy from the full brunt of the crisis, alleviating the health and social impact of the shock while maintaining macroeconomic stability and investor confidence," they said.
Deepening and broadening structural reforms will be essential to help unleash Egypt's enormous growth potential, they underlined.
They emphasized the importance of returning to the pre-COVID-19 primary surplus from FY2022/23 onwards, welcoming the medium‑term revenue strategy and the medium-term debt strategy.
The Central Bank of Egypt's (CBE) data driven approach to monetary policy has helped anchor inflation expectations. Continued progress on strengthening the monetary framework will also support monetary transmission, they said, adding that two-sided exchange rate flexibility is essential to absorb external shocks and maintain competitiveness.
They welcomed efforts to help diversify banks' revenue streams and enhance financial inclusion through digital financial technologies and a focus on underserved groups.