International Institutions Hail Egyptian Economy Performance

International Monetary Fund, Oxford Business Group and American Embassy in Cairo hailed the Egyptian economy performance. They stated that the Egyptian economy currently records high growth rates and low inflation rates as well as stability of the balance of payments and foreign monetary revenues which led to stability of the foreign exchange market.

Information and Decision Support Center report named "Egypt in the World's Eyes" referred yesterday 5-8-2006 to the IMF mention of the stability of the exchange rate contributed in enhancing the Egyptian economy.

The report showed the unexpected increase of the privatization transactions, the customs and taxes reforms that led to transparency increase as well as the efficiency of the governmental financial transaction.

IMF stated that reforms have to focus on the obstacles reduction faced by the private sector, the report mentioned. Such obstacles resulted from financial intermediation, the complicated bureaucratic procedures as well as public sector absorption to greater part of the national savings.

Implementation of such reforms requires political and social agreement and the government has to choose the appropriate time and economic conditions to implement such reforms.

The report showed the importance of applying more reforms in the data quality in Egypt concerning the price statistics, balance of payments, economic activity indicators and the public expenditures.

IMF believes in the importance of focusing on activating the financial policy in the coming phase as a tool to achieve the economic stability.

The report stated that the Egyptian government agreed with IMF on the importance of implementing comprehensive programme to reduce the expenditure volume through reducing the governmental institutions volume, increasing the governmental expenditure quality level as well as directing the public expenditure to the poor category in Egypt.

Central Bank of Egypt has to focus on making the inflation rate at low level, the report confirmed.

The report stated that the Egyptian government achieved remarkable progress in privatization programme and it also hailed the efforts done to end bureaucracy, enhance the labour market flexibility and provide more facilitation for small and medium enterprises to obtain appropriate finance.

Oxford Business Group confirming Egypt progress in exporting the natural gas and mentioning that Egypt's natural gas export to Turkey and Europe will have positive affection. Egypt as well will try to increase its dealing with the Asian market.

The report showed the place dimension between Egypt and the European market so the analysts see that Egypt has to focus on exporting gas to the neighboring countries.

Providing gas to Europe is an Egyptian hope where Egypt seeks to increase its gas exports that amounted to USD 2.2 billion, the report showed.

IMF and EFG-Herms expects that Egypt total exports of gas will increase to 20.8 billion meter cube in 2006/07 and 21.6 billion meter cube in 2007/08.

American Embassy in Cairo showed that Egypt economy regained its activity in FY 2004/05 after stagnation lasted from 2000-03 referring to the gross domestic production rate increase amounted to 5.1 per cent in FY 2004/05 compared to 4.1 per cent in FY 2003/04. Such increase resulted from the foreign monetary incomes.

The report expects that the private investment increase will lead to continues progress in the economic activity on the short-run. There are no enough job opportunities and therefore unemployment is the most important offered challenges in the coming phase.

Nazif government began to implement some reform plans since July 2004 includes required structure reforms in the taxes and customs system and the financial sector as well as the remarkable progress in implementing the privatization programme, the report added.

Expansion of financial policy through loan will be an obstacle to achieve expected growth rate. The report showed the privatization income increase during FY 2004/05 amounted to EGP 5.64 billion compared to EGP 0.554 during FY 2003/04. Activating the privatization programme contributed in selling 17 state-owned companies and 11 joint ventures.