Private sector could catapult Egypt’s real GDP growth to 5-6%: IMF’s Azour

Doaa A.Moneim , Wednesday 31 Jan 2024

Jihad Azour, director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), told Ahram Online that Egypt's GDP growth rate could increase by 5-6 percent if the government allows the private sector to play a leading role in Egypt's economy and reconsiders the role of the public sector.

Jihad Azour
Jihad Azou, Director of the Middle East and Central Asia Department at the International Monetary Fund.


Azour made his statements in response to a question by Ahram Online on the expected impact of the tensions in the Red Sea and the escalation in Gaza on Egypt's already struggling economy.

He spoke during a virtual press briefing the IMF held on Wednesday to release the update of the Regional Economic Outlook report for the Middle East and Central Asia region.

The report downgraded its projection for Egypt’s real GDP growth to 3 percent in 2024 and 4.7 percent in 2025, down from the 3.6 percent and 5 percent expected in October.

On the ongoing discussions between the IMF and the Egyptian government to press forward with conducting the first and second reviews of the $3 billion Extended Fund Facility (EFF) loan programme and the possibility that the IMF provide Egypt with an additional financing package, Azour told Ahram Online that the discussions are still in progress.

“The EFF programme with Egypt focuses on four cornerstones: protecting the country’s economy against external shocks (which is why a flexible exchange rate is one of the tools that guarantee a high level of economic protection); curbing down the elevating inflation, essential for the stability of the Egyptian economy and for alleviating the burden of inflation on the citizens; pushing forward the country’s real GDP growth; and expanding the social nets umbrella through the related social protection programmes," Azour explained to Ahram Online.

He highlighted that the targets of this programme have not been changed and that the EFF’s first and second reviews will be completed according to the objectives of the programme.

According to close sources to the ongoing discussions, the $3 billion financing package could increase to $7 billion. The additional package includes a $3 billion package and $1 billion that Egypt requested in 2022 under the IMF’s Sustainability and Resilience Trust.

The details of the discussions are expected to be announced in February.

According to Fitch Solutions' BMI, Egypt’s new IMF programme could reach $8.0 billion due to preferential treatment resulting from a concern for the impact of global and regional conflicts on the Egyptian economy and Egypt's geopolitical importance.

In December 2022, the IMF approved a $3 billion EFF loan programme for Egypt. Since then, Egypt has not completed the first and second reviews under the programme amid the ongoing challenges facing the country’s economy due to global and regional geopolitical tensions.

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