IMF Plans Discuss of Egypt’s Economic, Fiscal Policies on November 11

The International Monetary Fund (IMF) mission will start on November 11 its consultations in Cairo, under Article IV, to assess the country’s economic performance, said Jerry Rice, IMF media manager.

He added, in a press conference in Washington,that the mission will hold consultations over two weeks with officials from the Egyptian government and the central bank about Egypt’s economic and fiscal policies.

Earlier this month, IMF cut its growth forecast for the Egyptian economy on the back of security concerns affecting vital tourism revenues, according to Ahram Online. The economy is expected to grow 3.5 % in the fiscal year starting July 2014, the IMF said today in its October 2014 Middle East and Central Asia Economic Outlook report, down from 4.1 % predicted last April. Growth for the fiscal year ending 30 June 2014 was 2.2 %,.

The IMF partially attributed its forecast cuts to security issues “keeping tourism a way from Egypt and hampering Egyptian gas exports” that offset the recovery sensed in the country’s manufacturing activity and foreign direct investment (FDI) flow. Structural issues, such as electricity supply disruptions, further weakening of private investment confidence in the Egyptian economy, are also to blame the international lender said.

The past two consecutive governments in Egypt have been trying to revive an economy battered by political instability and violence since a popular uprising forced president Hosni Mubarak to step down in 2011. The IMF expects the budget deficit to reach 12.2 % in 2013/14, down from the 14.1 % high recorded in 2012/13.

IMF expectations remain, however, higher than governmental forecast of nearly 11 % deficit. The organisation expects an additional cut to the budget deficit to 11.5 % in 2014/15.