Global rise in food, energy prices affect Egypt amid Ukraine-Russia conflict: IMF

Doaa A.Moneim , Wednesday 20 Apr 2022

The global rise in food prices is a major challenge for Egypt amid supply chain disruptions and the Russian war in Ukraine, Deputy Director of the Fiscal Affairs Department at the International Monetary Fund (IMF) Paolo Mauro told Ahram Online during a press briefing.

Rising food, energy prices


Mauro added that Egypt’s debt to GDP ratio is expected to accelerate to 94 percent before starting to decline over the medium term to 80.7 percent in 2027.

This decline will take place if the budget attains a primary surplus of two percent and the government is able to finance its borrowing at a reasonable cost, he stated.

Mauro asserted that food security is another major challenge Egypt is facing among other food and oil importing countries, especially that Egypt is a large food importer. 

He added that the discussions the IMF is holding with Egypt pave the way for the country to receive a fresh loan that is expected to mitigate the severe impacts of the Russian-Ukrainian conflict and preserve the country’s s gains from the first wave of reforms, especially those relating to the budget and macroeconomic indices performance.

Director of the IMF’s Fiscal Affairs Department Vitor Gaspar noted that food importers, including Egypt, are vulnerable to the increasing food and energy prices and their implications, adding that this hike constrains these countries' fiscal space and push up the debt levels.

According to the Fiscal Monitor report, Egypt’s total revenue is expected to rise to 21.4 percent of GDP in 2022 and 2023, up from 20 percent in 2021, hitting 24.5 percent in 2024 before slowing down to 21.1 percent in 2027.

Amid the ongoing challenges, the report projected Egypt's general expenditure to widen to 28.2 percent of GDP in 2022 before de-accelerating to 26.7 percent over the medium term.

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