Saudi Press

Saudi Arabia and the world
Friday, Feb 03, 2023

Egypt’s new IMF deal aims to reduce government debt: Cabinet  

Egypt’s new IMF deal aims to reduce government debt: Cabinet  

CAIRO: The International Monetary Fund's new $3 billion financial support package for Egypt aims to reduce government debt to less than 80 percent of the gross domestic product in the medium term, Reuters reported citing a cabinet report released on Saturday. The IMF did not require the Egyptian government to cut spending on subsidies, the report said, adding that the new program aimed to strengthen the social protection network for citizens.
This approval demonstrates confidence in the country’s ability to fulfill its international obligations and achieve targeted economic growth, the Egypt State Information Service stated the government as saying in a statement released by the Cabinet media center. 

The government’s remarks came after the IMF executive board approved on Friday a 46-month, $3 billion financial support package for the Arab world's most populous country, saying it would catalyze additional funding of about $14 billion. 

Egypt negotiated its latest IMF loan as the economic fallout from the war in Ukraine exacerbated a foreign currency shortage resulting from Egypt's large trade deficit. 

In a background document on Egypt, the IMF said the new program would fund some of the country's foreign currency financing gap, and that Cairo had secured $5 billion in new financing for the fiscal year ending in June 2023. 

Of that, $2 billion would come from the sale of equity in private sector companies and $3 billion from multilateral support, separate to the rollover of deposits by Gulf states in Egypt's central bank. 

Economists say one reason Egypt has struggled to attract investment despite repeated IMF programs and reform plans is the prominent role of the state and the military in the economy, and the advantages afforded to state-owned enterprises over private-sector firms. 

The IMF's background document said its programme aimed to support plans by Egypt to reduce the state's footprint in the economy, increase transparency around SOEs, and create a level playing field for all economic actors. 

An Egyptian cabinet statement on Saturday said the government was acting quickly to issue a political document outlining economic sectors from which the state would withdraw. It said the cabinet approved a final draft on Nov. 30. 

The IMF document said Egyptian authorities had also committed to the publication by the finance ministry of biannual accounts of SOEs along with information on subsidies to SOEs. 

It said Cairo had further committed to publishing data including audit reports on fiscal accounts, procurement contracts of more than 20 million Egyptian pounds ($811,360), and an annual report on tax breaks, exemptions and incentives. 

Egypt’s IMF-supported program includes a comprehensive policy package to preserve macroeconomic stability, restore buffers, and pave the way for inclusive and private-sector-led growth, SIS reported. 

The package includes a monetary policy aimed at gradually reducing inflation, fiscal consolidation to ensure a downward public debt trajectory while enhancing social safety nets to protect the vulnerable, and wide-ranging structural reforms to reduce the state footprint and strengthen governance and transparency, the state information service added. 

Related Articles

Saudi Press
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
Shell reports highest profits in 115 years
EU found a way to use frozen Russian funds
First generation unopened iPhone set to fetch more than $50,000 at auction.
WARNING GRAPHIC CONTENT - US Memphis Police murdering innocent Tyre Nichols
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
Tesla reported record profits and record revenues for 2022
Germany confirms it will provide Ukraine with Leopard 2 tanks
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Opinion | Israel’s Supreme Court Claims a Veto on Democracy
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Who’s Threatening Israeli Democracy?
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Saudi FM discusses Kingdom’s economy, oil, Iran and US ties in Davos
Israelis rally in three cities against Netanyahu legal reforms
China's foreign ministry branch in Hong Kong urges British gov't to stop the biased and double standards Hong Kong report
Tesla slashes prices globally by as much as 20 percent
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
Lisa Marie Presley, singer and daughter of Elvis, dies aged 54
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Saudi Arabia plans to use domestic uranium for nuclear fuel
Mohammed Bin Salman chosen most influential Arab leader of 2022
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
United Arab Emirates says it will teach Holocaust in schools
Saudi Arabia set to overtake India as fastest-growing major economy this year 
International medical experts speak out against COVID-19 restrictions on China
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
Saudi Arabia’s female ambassadors: Who are the five women representing the Kingdom?
Almubarak named ‘The Best Central Bank Governor of the Year 2023 for the Middle East’
Hong Kong property brokerages slash payrolls in choppy market
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Effect of EU sanctions on Moscow is ‘less than zero’ – Belgian MEP
Dubai announces $8.7 trillion economic plan to boost trade, investment and global hub status
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
A Republican congressman-elect is under investigation in New York after he admitted he lied about his education and work experience.
Brazilian football legend Pele, arguably the greatest player ever, has died at the age of 82.
Hong Kong to scrap almost all its Covid rules
EU calls screening of travellers from China unjustified