Arab Republic of Egypt: Request for Extended Arrangement Under the Extended Fund Facility-Press Release; and Staff Report

International Monetary Fund

No 2023/002, IMF Staff Country Reports from International Monetary Fund

Abstract: This paper highlights Arab Republic of Egypt’s Request for Extended Arrangement under the Extended Fund Facility (EFF). Egypt’s IMF-supported program presents a comprehensive policy package to preserve macroeconomic stability, restore buffers, and pave the way for inclusive and private-sector-led growth. The package includes a durable shift to a flexible exchange rate regime, monetary policy aimed at gradually reducing inflation, fiscal consolidation to ensure downward public debt trajectory while enhancing social safety nets to protect the vulnerable, and wide-ranging structural reforms to reduce the state footprint and strengthen governance and transparency. The EFF is expected to catalyze additional financing from Egypt’s international and regional partners. The authorities’ economic program supported by the 46-month EFF arrangement provides a credible policy package to reduce imbalances, maintain macroeconomic stability, restore buffers and improve resilience against shocks, and pave the way for private-sector-led growth. Given the heightened uncertainty and risks to the global economic outlook, the authorities’ commitment to stay the course on exchange rate flexibility, prudent macroeconomic policies, and structural reforms is critical.

Keywords: EFF arrangement; policy package; financing gap; policy transmission; GRA credit; long-term debt; policy distortion; Debt service; Credit; Global (search for similar items in EconPapers)
Pages: 107
Date: 2023-01-10
New Economics Papers: this item is included in nep-ara and nep-cis
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