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Al-Ahram Weekly
19-05-2025
- Business
- Al-Ahram Weekly
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. Follow us on: Facebook Instagram Whatsapp Short link:
Business Recorder
19-05-2025
- Business
- Business Recorder
IMF warns India-Pakistan tensions could threaten reform, fiscal goals
ISLAMABAD: The rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten enterprise risks to the fiscal, external and reform goals of the program, says the International Monetary fund (IMF). The Fund in its latest report stated that reputational risks could also come from any perceived lack of even handed or if there was a perceived misuse of Fund disbursements. As mitigants, the Pakistani authorities have reiterated their strong commitment to the program, which is designed to help restore economic stability, build resilience through stronger reserve buffers, and advance reforms to create stronger and inclusive growth. IMF reaffirms support for Pakistan's bailout, calls for deesclation with India Moreover, disbursements under the Extended Fund Facility (EFF) are dedicated to build reserves, and the program's ambitious fiscal and reserve goals (including floors on social spending) limit the space for non-priority spending and the use of reserves to finance imports. Given the Resilience and Sustainable Facility (RSF)'s different purpose, its disbursements are available for fiscal financing, although there cannot be any disbursements outside of an EFF review and not before completion of the second review. Careful Fund communication will be essential to underscore the Fund's neutral role and avoid misperceptions about its lending activities, it added. Copyright Business Recorder, 2025
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Business Standard
09-05-2025
- Business
- Business Standard
India abstains from IMF vote on Pakistan loan; flags terror financing
India on Friday abstained from voting on two separate loans worth $2.3 billion sought by Pakistan from the International Monetary Fund (IMF), but red-flagged the possibility of misuse of these funds for state-sponsored cross-border terrorism. Rewarding it sends 'a dangerous message' to the world and 'makes a mockery of global values,' India said in a statement. The IMF okayed disbursement of $1 billion to Pakistan, according to a PTI report. India's strongly worded statement pointed to Pakistan's poor track record on adhering to the Fund's loan conditions despite which it has received disbursements in 28 of the 35 years since 1989, a finance ministry statement said. These concerns were raised by India over the efficacy of IMF programs as 'an active and responsible member country', the statement stressed. 'India pointed out that rewarding continued sponsorship of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors to reputational risks, and makes a mockery of global values. While the concern that fungible inflows from international financial institutions, like IMF, could be misused for military and state sponsored cross border terrorist purposes resonated with several member countries, the IMF response is circumscribed by procedural and technical formalities,' according to the statement. India termed this 'a serious gap' that showcases an urgent need to appropriately consider 'moral values' in the procedures followed by global financial institutions like the IMF. India's concerns were conveyed at a review by the IMF board of an extended Fund Facility lending program of $1 billion and a fresh Resilience and Sustainability Facility lending program $1.3 billion for Pakistan. Citing the Pakistan chapter of an IMF report on 'Evaluation of Prolonged Use of IMF Resources', India's representative on the board pointed to 'a widespread perception that political considerations have an important role to play in the IMF lending to Pakistan'. 'As a result of repeated bailouts, Pakistan's debt burden is very high, which paradoxically makes it a too big to fail debtor for the IMF,' it pointed out, after noting the frequent loans disbursed to the country, including four lending programs since 2019. Pakistan military's deeply entrenched interference in the country's economic affairs poses significant risks of policy slippages and reversal of reforms, India pointed out. 'Even when a civilian government is in power now, the army continues to play an outsized role in domestic politics and extends its tentacles deep into the economy. In fact, a 2021 UN report described military-linked businesses as the 'largest conglomerate in Pakistan'. The situation has not changed for the better; rather the Pakistan Army now plays a leading role in the Special Investment Facilitation Council of Pakistan,' it was pointed out to the IMF. While Pakistan has been a 'prolonged borrower' from the IMF, India noted that it would not have sought 'another bail-out program' had the previous programs succeeded in putting in place a sound macro-economic policy environment. 'India pointed out that such a track record calls into question either the effectiveness of the IMF program designs in case of Pakistan or their monitoring or their implementation by Pakistan,' the finance ministry statement said. While India has traditionally refrained from voting on Pakistan's loan requests at the IMF board, last year, it had suggested that the IMF put in place conditions to ensure that Pakistan doesn't use such loans for defence spending and repaying third country debt obligations.
Time of India
09-05-2025
- Business
- Time of India
India abstains from voting on Pakistan's bailout package at IMF meeting
India on Friday abstained from voting in International Monetary Fund's Extended Fund Facility (EFF) lending program. #Operation Sindoor India-Pakistan Clash Live Updates| Missiles, shelling, and attacks — here's all that's happening Pakistani Air Force jet shot down in Pathankot by Indian Air Defence: Sources India on high alert: What's shut, who's on leave, and state-wise emergency measures The world body reviewed the EFF lending program ($1 billion) and considered a fresh Resilience and Sustainability Facility (RSF) lending program ($1.3 billion) for Pakistan. India raised concerns over the efficacy of IMF programs in in Pakistan given its poor track record, and also on the possibility of misuse of debt financing funds for state sponsored cross border terrorism. 5 5 Next Stay Playback speed 1x Normal Back 0.25x 0.5x 1x Normal 1.5x 2x 5 5 / Skip Ads by In a statement, India said, "Pakistan has been a prolonged borrower from the IMF, with a very poor track record of implementation and of adherence to the IMF's program conditions. In the 35 years since 1989, Pakistan has had disbursements from the IMF in 28 years. In the last 5 years since 2019, there have been 4 IMF programs." Live Events You Might Also Like: On IMF's lifeline, Pakistan struggles as India wields its economic power to block handouts India said that there would be no need for another bailout program if the previous grants were successful. "Had the previous programs succeeded in putting in place a sound macro-economic policy environment, Pakistan would not have approached the Fund for yet another bail out program. India pointed out that such a track record calls into question either the effectiveness of the IMF program designs in case of Pakistan or their monitoring or their implementation by Pakistan." India also said that Pakistan military's interference in economic affairs posed a risk of slippages and reversal of reforms, adding that even though a civil government is in power, the army plays a role in politics and economics. "Pakistan military's deeply entrenched interference in economic affairs poses significant risks of policy slippages and reversal of reforms. Even when a civilian government is in power now, the army continues to play an outsized role in domestic politics and extends its tentacles deep into the economy. In fact, a 2021 UN report described military-linked businesses as the 'largest conglomerate in Pakistan'. The situation has not changed for the better; rather the Pakistan Army now plays a leading role in the Special Investment Facilitation Council of Pakistan." You Might Also Like: "Those bailing out Pakistan should see clearly", says Foreign Secretary as India prepares to present case at IMF board meeting India further flagged the Pakistan chapter of the IMF Report on 'Evaluation of Prolonged Use of IMF Resources'. The report noted that there was a widespread perception that political considerations have an important role to play in the IMF lending to Pakistan. "As a result of repeated bailouts, Pakistan's debt burden is very high, which paradoxically makes it a too big to fail debtor for the IMF." India pointed out that rewarding continued sponsorship of cross-border terrorism sends a dangerous message to the global community, exposes funding agencies and donors to reputational risks, and makes a mockery of global values. "While the concern that fungible inflows from international financial institutions, like IMF, could be misused for military and state sponsored cross border terrorist purposes resonated with several member countries, the IMF response is circumscribed by procedural and technical formalities," India argued. "This is a serious gap highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions," India added. The IMF took note of the India's statements and its abstention from the vote.
Egypt Today
26-03-2025
- Business
- Egypt Today
Prime minister says planned rise in fuel prices to be gradual, diesel to remain subsidized
FILE – Egyptian Prime Minister Mostafa Madbouly - Cabinet CAIRO – 26 March 2025: Prime Minister Mostafa Madbouly noted that the government will implement 'gradual' increases in fuel prices until the end of the year, as the rise cannot occur all at once. Speaking at a press conference following the weekly Cabinet meeting on Wednesday, Madbouly reassured citizens that diesel fuel will continue to be subsidized. Earlier in March, the International Monetary Fund (IMF) stated that Egypt, which is connected to the lender via an $8 billion Extended Fund Facility (EFF) loan program, remains committed to lifting fuel subsidies by the end of 2025. Last year, the government unveiled its plan to gradually lift fuel subsidies, citing 'a significant burden on the budget.' The country has raised fuel prices multiple times over the past decade, with the latest increase for gasoline and diesel occurring last October, valued at up to LE 2 ($0.04) per litre. IMF Managing Director Kristalina Georgieva emphasized in March 2024 the importance of Egypt replacing untargeted fuel subsidies with targeted social spending as part of a sustained fuel price adjustment package.
