Egypt’s economic growth rates exceed 5 %: Lipton

David Lipton, first deputy managing director of the International Monetary Fund (IMF), said that the Egyptian economy achieved growth rates that has exceeded 5 percent that was expected for it.

He added that the Egyptian authorities wisely implemented the country’s energy reform, adding, “four years ago, there was a huge amount of fuel subsidy expenditure, but the government decided to get out of the subsidies frame.”

Lipton said that depending more on energy subsidies led to three major destructive effects: exhausting state revenues, overstatement of consumption, and a big portion of government expenditure being spent that could have otherwise gone to education and health.

He noted that the high-income classes benefitted from about 60% of the subsidies, which led to disadvantaging low-income citizens, according to a previous study by the World Bank.

“The government understood that when you buy a certain commodity, you will have to pay for it,” said Lipton, noting that paying the real prices will help support the poorest members of society.

Meanwhile, Lipton said that Egypt enjoys financial stability and flows that led to high net foreign reserves at the Central Bank of Egypt, which will help face any future challenges, including a global economic slowdown.

The first phase of Egypt’s reform created a stable base for sustainable economic growth, said Lipton, noting, “we should not diminish the accomplishments that were done until now.”

Lipton added, “the difference between the current economic programme and the past cooperation is that the political leadership and the local authorities decided to face the economic issues with strong measures that can pull the country out of its problems.”