Press Release: Statement by IMF Managing Director Strauss-Kahn at the Conclusion of his Visit to Egypt
September 15, 2008Press Release No. 08/206
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Cairo at the conclusion of his visit to Egypt:
"This is my first visit to Egypt as Managing Director of the IMF. I congratulated President Hosni Mubarak, and Prime Minister Ahmed Nazif, and the economic team on Egypt's impressive economic performance in recent years. This has been underpinned by an ambitious structural reform program, including the liberalization of trade, foreign investment, and the exchange market, extensive privatization, and the modernization the financial sector. The reform program has not only boosted domestic investor confidence but also made Egypt a choice investment destination for regional and other international investors.
"We agreed on the need to sustain the momentum of reform, including by controlling inflation, which is the biggest threat to near-term economic stability. Egypt currently faces the challenges of surging food and fuel prices, which have put strain of the budget through the rising cost of subsidies. While declining international commodity prices should help bring down inflation, fiscal, monetary, and exchange rate policies must respond adequately and expeditiously to the increasing inflation risks. Failure to do so could undermine the reform program, growth, and poverty reduction efforts.
"Going forward, curbing the rise in subsidies, particularly through a better targeting toward the poor, will be essential. This will also create room to boost spending on investment and education, and help to further reduce public debt, which are essential for sustaining broad-based growth.
"The financial sector is sound and robust to shocks, but I welcomed ongoing efforts to further strengthen sector supervision. Egypt's deepening integration in the global economy is also welcome. I assured President Mubarak, and the economic policy team, that the Fund will continue to provide advice and support for Egypt's continuing reform efforts."