EGYPT'S GDP UP TO 5.3%

IMF - An International Monetary Fund (IMF) team led by Mr. Subir Lall visited Egypt on October 18-31, 2018 to conduct the fourth review of Egypt's economic reform program supported by a three-year Extended Fund Facility. At the end of the visit Mr. Lall issued the following statement:

"The IMF staff team and the Egyptian authorities have reached a staff-level agreement on the fourth review of Egypt's economic reform program, which is supported by the IMF's SDR 8.597 billion (about $12 billion) Extended Fund Facility arrangement. The staff-level agreement is subject to approval by the IMF's Executive Board. Completion of this review would make available SDR 1,432.76 million (about US$2 billion), bringing total disbursements under the program to about US$10 billion.

"The Egyptian economy has continued to perform well, despite less favorable global conditions, supported by the authorities' strong implementation of the reform program. GDP growth accelerated from 4.2 percent in 2016/17 to 5.3 percent in 2017/18 while unemployment declined to below 10 percent. Meanwhile, the current account deficit narrowed to 2.4 percent of GDP in 2017/18 from 5.6 percent the year before, primarily driven by strong remittances and a recovery in tourism. Gross general government debt declined from 103 percent of GDP in 2016/17 to about 93 percent of GDP in 2017/18, supported by fiscal consolidation and higher growth.

"The Central Bank of Egypt's (CBE) prudent monetary policy helped bring down annual inflation from 33 percent in July 2017 to 11.4 percent in May 2018. However, inflation increased again to about 16 percent in September 2018, reflecting the pass-through from energy price increases in June and a stronger than expected increase in volatile food prices in September. In the medium term, the CBE aims to reduce inflation to single digits. Meanwhile, in the current external environment of tighter financing conditions for emerging markets, the CBE's commitment to a flexible exchange rate policy will help enhance competitiveness, protect Egypt's foreign reserves, and cushion against external shocks. Egypt's banking system remains liquid, profitable, and well capitalized.

"Egypt's fiscal policy in 2018/19 and beyond will continue to aim at keeping general government debt on a clearly declining path and achieving a primary surplus of 2 percent of GDP. The government also remains committed to continuing energy subsidy reforms and raising revenues which will help create fiscal savings to invest in a well targeted social safety net, human development including health and education, and infrastructure. To improve fiscal transparency and public access to information, the authorities have continued to expand the data disseminated on the budget process and execution throughout the year.

"We welcome the authorities' comprehensive efforts to improve the living standards of the most vulnerable. These efforts include: Takafol and Karama, which has expanded to cover around 10 million individuals; Forsa, which has created job opportunities for graduates of the Takafol program; and, Mastoura, which provides microfinancing to women for sustainable income generation. These programs are being complemented with the Sakan Karim program to provide clean drinking water and sanitation to rural areas. Moreover, a social package consisting of an additional increase in the salaries of public servants, an increase in pensions, and a progressive increase in tax credits has been implemented.

"The government continues to make efforts to implement reforms that aim to help the private sector invest and create the jobs needed to achieve more inclusive and sustainable growth for Egypt's young and growing population. These reforms include: improving access to industrial land; promoting competition; improving transparency and accountability of state owned enterprises; and fighting corruption.

"The team would like to thank the Egyptian authorities and the technical teams in the CBE and the Ministry of Finance, and other interlocutors, for their openness, candid discussions, and hospitality."

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Earlier:

2018, May, 21, 10:35:00 IMF: EGYPT'S GROWTH UP IMF - “Egypt’s growth has continued to accelerate during 2017/18, rising to 5.2 percent in the first half of the year from 4.2 percent in 2016/17. The current account deficit has also declined sharply, reflecting the recovery in tourism and strong growth in remittances, while improved investor confidence has continued to support portfolio inflows. In addition, gross international reserves rose to $44 billion by end-April, equal to 7 months of imports.

2018, April, 25, 09:45:00 EGYPT NEED INVESTMENT $10 BLN REUTERS - Egypt aims for foreign investment in the oil and gas sector to reach about $10 billion in the 2018/19 fiscal year that begins in July, Petroleum Minister Tarek El Molla said

2018, February, 14, 09:40:00 BP STARTS IN EGYPT BP announced the start of gas production from the Atoll Phase One project, offshore Egypt. The project, in the North Damietta concession in the East Nile Delta, was delivered seven months ahead of schedule and 33% below the initial cost estimate.

2018, February, 2, 12:08:00 ZOHR INCREASES OUTPUT BLOOMBERG - Zohr, the largest undersea gas discovery in the Mediterranean, will pump 1.7 billion cubic feet per day before the end of 2018, el-Molla said in a televised ceremony to inaugurate the field. Egypt is talking with Rome-based Eni to increase output to reach the 2019 production target this year instead, he said.

2018, January, 24, 11:50:00 EGYPTIAN MACROECONOMIC TURNAROUND IMF - “This macroeconomic turnaround at home and the supportive global economic environment provide a unique opportunity to carry the reform momentum into areas that have historically been hard to tackle. Deep and lasting structural reforms are needed to create jobs as speedily as needed for Egypt’s growing population,” said Subir Lall, head of the IMF team for Egypt.

2017, December, 20, 19:20:00 BP: ZOHR HAS STARTED BP - BP confirmed that production has started from the super-giant Zohr gas field, offshore Egypt. The field is operated by Eni, through its joint venture with The Egyptian General Petroleum Corporation (EGPC), and is the largest natural gas discovery yet to be made in the Mediterranean Sea.

2017, December, 13, 12:25:00 RUSSIAN - EGYPTIAN NUCLEAR ROSATOM - Cairo, Egypt - On December 11, 2017, Director General of ROSATOM Alexey Likhachev and Egypt’s Minister of Electricity And Renewable Energy Mohamed Shaker signed the Notices to proceed the contracts for the construction of the El Dabaa nuclear power plant.