IMF representative: more reforms needed for Egyptian economy

Representative of the International Monetary Fund (IMF) in Egypt Nadim Ul-Haq said that the Egyptian economy is currently witnessing an improvement and that it is under the government's control. He noted that a surplus in the balance of payments has been detected, while no rise in the rates of inflation has been marked.

"Moreover, the level of foreign reserves is maintained. Despite the rise in the deficit in the general budget, yet it does not constitute a big problem and could be restored to its previous level without much difficulty," he said.

Egypt's economy needs to realize high growth rates, exceeding the current rates which at present range between 2 to 3 percent annually, Ul-Haq said, pointing out that the Egyptian economy is counting, to a great extent, on the global one (through the revenues of tourism, exports and the Suez Canal) which has recently declined and caused a drop in the world economy's growth rates. "Hence, more internal economic reforms are needed for pushing ahead the process of the Egyptian economy," he elaborated.

He pinpointed that the IMF approves the reforms announced by the Egyptian government which cover the fields of trade, the financial sector and privatization, along with preserving the stability of macro -economy.

Reforming the financial sector provides for restructuring the state-run banks, privatizing a part of the banking machinery and executing the banking reform programme, Ul-Haq said. "This in addition to proceeding with the privatization of the public sector companies in a way to allow the flow of investments in the Egyptian Stock Exchange (ESE), given that this is an important factor in accelerating the economic growth," he added.

"Reforms in the field of trade envisage the improvement of the customs department and the restructuring of the tariff, not reducing it," the IMF official, further noted.