IMF Forecasts a continuation of Egypt's economic growth
Egypt, Economics, 9/6/2000

Egypt's economic growth is likely to continue while the country's inflation rate is expected to remain at the level of about 4 per cent, according to the latest report issued by the International Monetary Fund (IMF).

However, some recent developments have demonstrated that further progress should be made in the fields of restructuring and economic liberalization in order to preserve the country's strong economic performance, the report elaborated.

Under the rubrics of " World Economic Prospects", the report observed that the Egyptian foreign current account has been switched from the status of slight surplus registered between 1996-97 to a moderate deficit in 1998-99. This was partially attributed to the extension of local credits.

Foreign currency reserves also slashed, while the interest rates remained relatively low, a matter which led the Central Bank of Egypt (CBE) to finance the government's deficit from its source, the report noted.

Terming as a moderate the continued economic growth in the Middle East, the report anticipated that Saudi Arabia and Kuwait may witness negative development due to the decline of oil prices.

Middle Eastern and North African economies were recently influenced by a number of developments including the surge of oil prices since March, a matter which assisted in improving financial balances in general. However, the continued deck of prices of non-oil commodities have greatly restricted growth in several countries eapecially in Africa, the report, said.

Some countries especially in the African continent hav taken advantage of easing external debt burdens, it added.

Regarding the economies of the emerging countries, the report referred to the retreat of the economic turbulence which had earlier swept the emerging markets. However, it did not rule out the possibility of future setbacks due to the problems facing some countries within the international economic system and the need for continued restructuring in many states.

The report expected fundamental changes in the world economy after the emerging economies would overcome the latest recession. In case of the influx of mega capital to the emerging economies, they should capitalise on lessons learned from the previous crisis, the report assessed.

It also advised the Middle East and Africa to build on the progress made in the fields of restructuring and regulating general financial conditions including efforts to diversify the economies of the oil-oriented countries.

The report welcomed the promotion of the world economy in 1999 including the rapid recovery of most Asian economies. Restricting the money market influences may help achieve further growth in emerging markets, it assessed.

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