Egypt proud of partnership with IMF across various reform programmes: PM Madbouly - Economy
Prime Minister Mostafa Madbouly expressed Egypt's pride in its partnership with the IMF over the past few years across various economic reform programmes.
Madbouly said this on Sunday evening during a press conference with Nigel Clarke, the IMF's deputy managing director.
The prime minister also reaffirmed Egypt's commitment to its $8 billion Extended Fund Facility (EFF) loan programme with the International Monetary Fund (IMF), highlighting the notable progress achieved over the past few months.
Madbouly and Clarke gave press statements following their extended meeting on Sunday at the cabinet headquarters in the New Administrative Capital.
The meeting occurred as part of the IMF delegation's current visit to Egypt to conduct the fifth review of the country's ongoing economic reform programme, implemented by the Egyptian government and the Central Bank of Egypt (CBE) in cooperation with the fund.
CBE Governor Hassan Abdalla, Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat, Minister of Finance Ahmed Kouchouck, and Executive Director and IMF Board Member Mohamed Maait, who represents the Arab group and the Maldives, attended the meeting.
In his remarks, Madbouly welcomed Clarke and his accompanying IMF delegation in his first official visit to the country since he was appointed in October 2024 as the official in charge of Egypt's IMF portfolio.
Longstanding partnership
PM Madbouly noted that the reform programmes, implemented in partnership with the IMF, came amid significant internal and international challenges that heavily impacted the country's economy.
Since 2016, Egypt has sealed four loan agreements with the IMF, totalling nearly $30 billion. This is in addition to the newly approved $1.3 billion loan programme under the fund's Resilience and Sustainability Facility (RSF).
PM Madbouly noted that the current national economic reform programme, designed by the Egyptian government with IMF support, represents a tangible model of success.
The programme is being implemented steadily, based on a flexible exchange rate regime, increased foreign currency reserves, and ongoing efforts to maintain fiscal discipline and reduce the debt-to-GDP ratio.
Egypt's economic resilience amid challenges
He added that Egypt's economy has demonstrated resilience and a capacity to absorb severe external shocks, like other nations during recent global turmoil. The IMF itself confirmed that Egypt is progressing steadily on its reform path.
Moreover, he highlighted key macroeconomic indicators that reflect this progress, including a real GDP growth rate of approximately 3.9 percent in the first half (H1) of the current FY2024/2025 (July-December 2024), an essential and positive sign.
According to Madbouly, private sector investments also rose by 80 percent, and foreign direct investment (FDI) increased by about 17 percent from July to December 2024.
He further noted that Egypt's non-oil exports grew by around 33 percent during the year's first nine months.
Madbouly clarified that these figures contributed to robust growth in productive sectors such as manufacturing, ICT, and tourism, boosting investor confidence in the Egyptian economy.
He also highlighted the latest drop in the country's unemployment rate, which dropped below seven percent, the lowest level recorded in Egypt's history.
Inflation, debt on track
The prime minister pointed out that the country's inflation rates have declined significantly, dropping to 13.9 percent in April, down from over 37 percent during the same period in 2024.
He also highlighted Egypt's progress in debt reduction, a key component of the current EFF loan programme. In line with the programme, Egypt aims to reduce its debt-to-GDP ratio to 85 percent by June 2025, down from 96 percent in June 2023.
Furthermore, Madbouly noted that the budget deficit decreased to 6.5 percent over the past 10 months, compared to 6.7 percent.
He reaffirmed that the state is fully committed to continuing on the path of economic reform.
He said Egypt had completed four previous programme reviews and is currently engaged in the fifth review, which will continue in collaboration with the IMF in the coming days.
According to the reviews schedule, the fifth review is anticipated to be completed before the end of June. Once completed, Egypt will be eligible to receive a tranche of $1.2 billion.
Praising Egypt's achievement
For his part, Clarke affirmed that Egypt has made tangible progress on its macroeconomic reform programme.
'This is an Egyptian-led programme that has resulted in a sharp decline in inflation and unemployment, while foreign currency reserves have surged, and the availability of foreign exchange has significantly improved," he said.
"This is no longer a major issue as it once was. We've also seen a steady increase in GDP growth, and Egypt's economy is clearly moving toward greater stability,' Clarke added.
He noted that the Egyptian government's bold decisions and actions made these important positive outcomes of the economic reform programme possible.
These reforms include the adoption of a flexible exchange rate regime, a monetary policy focused on achieving economic stability, and ongoing efforts to mobilize domestic revenues to ensure a sustainable and stable fiscal policy.
He further emphasized that progress in Egypt's economic reform programme also encompasses a social dimension, including measures to support the most vulnerable segments of society.
Welcoming Egypt's reforms
'I welcome these reforms that have led to such positive results,' Clarke said, calling for the continued implementation of the economic reform programme.
Clarke also pointed to the increase in private sector financing and its rising share in the GDP.
'All of this is a direct response to the improvements and stability witnessed in the macroeconomic environment,' he stated.
He also stressed that a swift transition to a more sustainable economic model requires the private sector to lead economic growth and activity.
He confirmed that Egypt is already on this path, and the IMF is working with the government to accelerate this transition, reduce the state's role in economic activity, open space for the private sector, and promote fair competition across financial sectors.
'This will enhance the dynamism of the economy, attract both domestic and international investment, and lead to greater progress and prosperity for the Egyptian economy. Most importantly, it will help establish a more sustainable economic model,' Clarke stated.
In addition, he addressed the issue of economic shocks, which he described as a prominent feature of today's global economic system.
He stressed that the critical question for this region in particular is how to build a resilient economy to absorb such shocks. Clarke stated that achieving such resilience strongly depends on economic stability and sustained efforts to shift toward a more stable economic model.
He also expressed the IMF's appreciation for its longstanding partnership with Egypt, describing the country as a key fund member.
He reaffirmed the IMF's ongoing support for Egypt as it implements bold economic reforms that will benefit the Egyptian people.
Ambitious indicators
During his meeting with Clarke, Minister Kouchouk stated that Egypt's economy is improving with strong and ambitious indicators. The robust financial performance over the past ten months reinforces the country's commitment to a comprehensive national reform plan.
Kouchouk added that Egypt has achieved its highest-ever primary surplus, amounting to 3.1 percent of GDP, from July to April.
He also stressed that the government is pursuing an advanced path in fiscal policy management with more effective and stimulating initiatives to boost economic activity.
Furthermore, Kouchouk asserted that private sector empowerment efforts are bearing fruit, accounting for 60 percent of total investment during the fiscal year's first half.
He also anticipated a strong impact from the recent package of tax relief initiatives, which aim to broaden the tax base.
Kouchouk further emphasized that tax reform is grounded in building trust with taxpayers and is underpinned by strong partnerships and support for the business community.
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