The International Monetary Fund supports Egypt’s efforts in achieving economic reform, the IMF’s managing director Christian Lagarde told Egypt’s President Abdel-Fattah El-Sisi during a meeting on the sidelines of the G20 summit in China.
The meeting – attended by Egypt’s central bank governor Tarek Amer and other top Egyptian ministers – comes several weeks after Egypt and the IMF reached a tentative financing accord on a three-year extended fund facility (EEF) programme worth about $12 billion (SDR 8.5966 billion, or 422 percent of Egypt's quota).
According to Egypt’s presidency spokesman Alaa Youssef, the meeting witnessed discussions related to the initial agreement between the IMF and Egypt, which is expected to be approved by the fund's executive board in the coming weeks.
Lagarde praised the efforts exerted by the Egyptian government to develop the economy through applying necessary economic reforms to overcome the challenges that obstruct pushing the country’s economy forward, Youssef said.
She wished the government luck in its mission to accomplish its developmental goals, he added.
Meanwhile, El-Sisi stressed to Lagarde Egypt’s keenness to strike a balance between raising growth rates and financial stability and social justice in a way that ensures protection for low income citizens.
The president asserted that the state would continue with plans to promote a social protection safety net throughout the coming period, Youssef said.
The meeting also covered attempts by Egypt to create an attractive atmosphere for investments, considering it a pillar in raising growth rates, creating jobs and lowering public debt.
Egypt aims through its government reform programme to curb a huge budget deficit (between 11 and 13 percent over the past six years) and growing public debt, stimulate growth, create more jobs to lower unemployment and poverty rates, and increase national income.
Last week, Egypt’s parliament approved a long-delayed value added tax (VAT) at a rate of 13 percent for the 2016/17 fiscal year, but said it will rise to 14 percent the following year.
The VAT is part of the government economic reform programme that has been endorsed by the IMF.
Egypt, which relies heavily on imports, particularly foodstuffs, has been suffering a severe shortage of hard currency reserves in the last several years due to political instability which scared off tourists and foreign investors.