Egypt makes fiscal progress under IMF reform programme: Analyst

Big 5

Egypt has made fiscal progress under the International Monetary Fund reform programme, Credit Suisse International Wealth Management research analyst Krithika Subramanian told CNBC on Wednesday.

Asked if the ongoing protests in Jordan over austerity reforms would be a concern for the Egyptian government, Subramanian said North African country is expected to continue the efforts under the IMF programme as it has gained a good reform momentum so far.

“We (Credit Suisse) are very bullish on Egypt as there have been a lot of reform momentum,” Subramanian said.

“In the second half (of the year), we believe tourism (in Egypt) would return and will support the (local) currency and the market in general,”

Egypt’s economy has been struggling since a 2011 uprising drove tourists and foreign investors away, but economic reforms tied to a $12-billion three-year IMF programme agreed in late 2016 have led to positive indicators after years of turmoil.

The International Monetary Fund hailed Egypt’s progress on economic reforms in its second major review of the country’s loan programme last January, revising up its growth outlook but warning against the risks of not pushing forward with austerity. The IMF has forecast that Egypt will grow by 5.2 percent this financial year, up from about 4.1 percent a year earlier.

IMF First Deputy Managing Director David Lipton said later in March that Egypt will have to deepen its IMF-backed reforms and better encourage private sector growth if it wants to cash in on a wave of global expansion that may soon come to an end.

Lipton praised the country’s progress but said “broadening and deepening the reform agenda” is crucial to take advantage of ripe global conditions.