Arab Finance: Experts and economic analysts confirmed that President Abdel Fattah El-Sisi He sent several messages during his speech in the dialogue session on the sidelines of the second edition of the World Conference on Health, Population and Human Development, where the first message was directed to the citizen and the other was directed to the government.
President Abdel Fattah El-Sisi had stressed that the Egyptian state is part of the world economy and the challenges facing the world must be taken into account.
President Sisi added, during his speech: “We lost about 6-7 billion dollars during the last 10 months only due to the events in the region, and the matter is bearable for another year as a result of the repercussions that we are seeing.”
President Sisi continued: “When we talk about the program that we agreed upon with… International Monetary Fund“It is an important matter for the government. If the challenge will make us put pressure on public opinion in a way that people cannot bear, the situation must be reviewed with the Fund.”
President's messages to the government and citizens
For his part, Dr. Fakhri Al-Feki, Chairman of the Planning and Budget Committee in the House of Representatives, and a former expert at the International Monetary Fund, said in exclusive statements to Arab Finance that President Abdel Fattah Al-Sisi’s message is directed to the Egyptian interior, and in particular to the citizen, to reassure him, and that he stands with him in his suffering with high prices.
Al-Fiqi added that the second message relates to his directives to the government, which relate to emphasizing the necessity of reviewing the economic reform program that Egypt developed, approved and financed by the International Monetary Fund, pointing out that the International Monetary Fund raised the loan for Egypt from 3 billion dollars to 8 billion dollars, indicating that Egypt has 3 reviews out of a total of 8 reviews with the IMF.
The fourth review with the IMF is approaching
Al-Feki revealed that Egypt is close to the fourth review of the economic reform program, which is scheduled for the first of next November 2024, and that President Sisi directed the government to review the economic reform program with the IMF as a result of the high prices that could negatively affect the social fabric in Egypt.
Al-Fiqi explained that Egypt is a large and pivotal country in the Middle East, and any disruption in its social fabric will harm Egypt as well as the reputation of the International Monetary Fund. Therefore, President Sisi stressed that the government should review the economic reform program with the IMF so that the citizen is not exposed to negative effects, especially with the slowdown in economic growth in Egypt. Egypt, inflation, high interest rates, and all of these factors coincide with periodic rises in energy prices, as they increased three times in one year during the months of March, July, and October 2024.
Stop increasing petroleum products for 6 months
The former expert at the International Monetary Fund confirmed that the government will stop increasing petroleum supplies for 6 months, and that negotiations will be made with the International Monetary Fund mission to postpone some of the measures and procedures that were agreed upon in the economic reform program until inflation decreases and the interest rate decreases.
Al-Fiqi expected the government to take several measures to alleviate the burden on citizens, as it did last year and before, by increasing salaries and pensions and supporting irregular workers, as well as the Takaful and Karama program with exceptional packages of increases, pointing out that there are 12 million citizens receiving pensions, in addition to the increase in salaries that will benefit approximately 5 million employees, provided that this increase is implemented early with the 2025-2026 budget after March 2025.
Al-Fiqi also expected to raise the tax exemption limit to about 72 thousand pounds annually for both government and private sector employees.
It is necessary to develop a plan to remedy the imbalance in the balance of payments
While Dr. Ezz El-Din Hassanein, the economic expert, said that the International Monetary Fund deals with countries under certain conditions and guarantees, just as banks deal with individuals and companies that request lending.
Hassanein stressed that Egypt has many problems in the balance of payments, and this current imbalance and its permanent deficit, which has been ongoing for about 40 years, must be addressed, as imports are twice as large as exports, in addition to the imbalance in the state’s general budget as a result of expenditures exceeding revenues, calling for the need to develop a plan to remedy them. This imbalance is achieved by developing a strategy to reduce the state’s general budget deficit within two years, while addressing the current account deficit in the balance of payments within 5 years, with the necessity of resolving the exchange rate crisis resulting from the imbalance in the trade balance.
Hassanein called for making room for the private sector to obtain the necessary financing for projects, whether industrial or agricultural, stressing that President Abdel Fattah El-Sisi’s message to citizens is a positive message that confirms his consideration for their circumstances.
The economic reform program contributed to Egypt obtaining reduced financing
Dr. Walid Gaballah, an economist and member of the Egyptian Society for Economics, Statistics and Legislation, said that Egypt has been exposed to many shocks, such as the Corona virus, the Russian war, and finally the war on Gaza, which had many economic impacts on Egypt, such as a decline in Suez Canal revenues.
Jaballah added that the state has taken a number of measures recently to strengthen industry and stimulate the private sector.
He stressed that the state is continuing its reform program, which contributed to creating job opportunities and reducing unemployment to 6.5%, pointing out that the Egyptian economic reform program contributed to Egypt obtaining reduced funding from international institutions.
International Monetary Fund program with Egypt
On March 6, 2024, the Egyptian government announced the signing of an agreement with the International Monetary Fund to obtain a new loan, hours after a decision by the Central Bank allowing the “liberalization” of the pound’s exchange rate.
The Fund approved a loan to Egypt worth $8 billion, an increase from the $3 billion that was previously being talked about.
The agreement was signed after the value of the Egyptian pound was reduced to an unprecedented low level of 49 pounds to the dollar, from about 30.85 pounds, as adopting a more flexible exchange rate is a major requirement in the International Monetary Fund’s support program.
Last March, Madbouly considered that “this agreement will help increase the Egyptian state’s foreign reserves,” stressing that there is great agreement between Egypt and the International Monetary Fund on the terms of the agreement, indicating the government’s endeavor to increase foreign investments instead of local ones, and the state’s exit from the economy and open the field more. For the private sector.
He said: “We are working to reduce inflation, create job opportunities, and ensure the inflow of foreign investments.”
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