IMF’s Lagarde: Egypt economy is back on a productive, positive path

Egypt is making a clear rebound of growth and the Egyptian economy is back on a productive and positive path, International Monetary Fund Managing Director Christine Lagarde said on Thursday.

The IMF chief said Egypt’s step to float its currency, reestablish decent reserves in a bid to stabilizes its macroeconomic situation, as well as reduce its fiscal deficit is all heading in the right direction.

“And we are clearly seeing a rebound in the foreign direct investment and in investment in Egypt in general.” Lagarde told a news conference in Washington where world financial leaders gathered for the start of the IMF and World Bank spring meetings.

The IMF official also said the Egyptian authorities have provided a social protection safety net that was maintained in the IMF programme so that the middle class would be protected. Therefore, all the IMF’s cash transfers and mechanisms in place were more focused on the poor and the most exposed people than on the better off in Egypt, she added.

“It is clear that when you remove fuel subsidies, for instance, all those driving, whatever they drive, are going to be affected; and the cash transfers and mechanisms in place were actually more focused on the poor and the most exposed people than on the better off in the Egyptian society.” Lagarde said.

“What we are seeing is a clear rebound of growth as well, and hopefully the Egyptian economy is back on a productive, positive path that will be beneficial for all.”

In November 2016, Cairo agreed the three-year loan deal with IMF, which involved tough economic reforms, such as cutting its budget deficit and floating the Egyptian pound. The currency plunged as low as around 19.50 to the U.S. dollar in subsequent weeks.

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