Transcript of Middle East and Central Asia April 2024 Press Briefing

April 18, 2024



Director of Middle East and Central Asia Department

International Monetary Fund

Communications Officer

International Monetary Fund

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MS. ALSHAMI: Good morning. Good afternoon. Thank you for joining us today on the Regional Economic Outlook for the Middle east and Central Asia. I'm Angham Alshami from the Communications Department here at the IMF. If you're joining us online, we do have Arabic and French interpretations that you can access on the IMF Regional Economic Outlook webpage and the IMF Press Center, and of course in the room.

I'm joined here today by Jihad Azour, Director of the Middle east and Central Asia Department, who will give us an overview of the report and then we will open the floor for your questions. Jihad, over to you.

MR. AZOUR: Angham, thank you very much. Good morning, everyone, and welcome to the Spring Meetings of 2024 and to the update from the Middle east and Central Asia. Let me start by giving you a summary on where things stand before taking questions. I will make a few brief remarks to highlight four key points from our report and then take your questions.

First, an uneven recovery is expected among MENA and CCA economies amid high uncertainty. While inflation is receding in line with global trends in most countries, growth prospects are diverging between and within regions. Starting with MENA, the new regional challenges are marked by geopolitical tensions. The conflict in Gaza and Israel has caused immense suffering. In addition, Red Sea shipping disruptions and oil production cuts have added to existing vulnerabilities related to high debt levels and elevated borrowing costs.

Accordingly, growth is projected to remain subdued, improving moderately to 2.7 percent in 2024, from 1.9 percent last year. This in fact reflects a 0.7 percent downgrade from October ‘23 projections, as conflict in Sudan and in Gaza, and also oil production cuts in the GCC weigh on activity this year. In 2025, growth is projected to strengthen to 4.2 percent as the impact of these temporary factors is assumed to fade gradually. Among GCC members, non hydrocarbon activity is said to be the main contributor to growth as countries continue to pursue economic diversification plans. Meanwhile, MENA emerging markets and middle-income countries face rising fiscal pressures, with elevated interest payment eroding efforts to strengthen fiscal positions.

In addition, conflicts are also adversely impacting activity in some fragile and low-income countries, though the tide may start to turn for a few of them, with economic conditions projected to improve in 2025 as the growth dampen factor gradually will wain. However, as you see on the chart, the potential lasting economic effects of conflicts are an additional challenge for the region. Our analysis shows that conflict not only causes lasting human and social cost, but also can lead to large and persistent output losses, with potential spillovers to other countries.

Turning to the CCA. The CCA economies exhibit continued resilience despite some moderation in growth. We project growth this year to remain robust at 3.9 percent in 2024, before picking up to 4.8 percent next year. And this is due to the loosening of macro policies, strong domestic demand, and some idiosyncratic factors, such as oil production increase. Over the medium-term, growth is expected to remain relatively stable among oil importing, supported by strong domestic demand while plateauing. Hydrocarbon production is projected to weigh on growth in oil exporter countries. In addition, trade diversion is reshaping trade in the CCA region. Following the onset of the war in Ukraine, countries in the CCA have been shifted -- has been in fact shifting their direction of trade flows.

The second issue is inflation. Inflation is receding in line with global trends in MENA. Inflation is approaching a historical trend in many economies, with about one third now close to or even below average, and monetary tightening cycles appear to have ended in most economies. After peaking in 2023, average inflation is forecast to ease to 14.5 percent in 2024 and 12.4 percent next year. These numbers partly reflect high inflation in Egypt and Sudan. Excluding those two economies, inflation is projected to average at 8.8 percent in 2024 and 7.8 percent next year. In the CCA, the majority of country inflation is below or close to targets, providing room for some countries to begin or continue monetary easing. Inflation is forecast to ease from 7.7 percent in 2024 to 7.1 percent next year in the CCA.

The third issue is related to vulnerabilities. Vulnerabilities remain high in a context of higher than usual uncertainty and elevated set of downside risks. For MENA, conflicts in Gaza and Israel remains a key downside risk, including the peril of further escalation or protracted conflict. The other challenges and risks for MENA economies are related to oil price vulnerability for oil exporters, tension on trade and transportation, and high debt and financing needs for emerging and middle-income countries. In addition to that, recurrent climate shocks are affecting low-income countries. For the CCA economies, the main risks stem from a slowdown in trading partners and worsening geoeconomic conditions related to the war in Ukraine.

The first point is the fact that we need to balance policy priorities in an uncertain time. Policy makers face the difficult task of safeguarding macroeconomic stability and sustainability while navigating geopolitical challenges and improving medium-term growth prospects. Monetary policy should remain vigilant, being cautious of premature or excessive easing. In addition, it is essential to strengthen monetary policy frameworks and increase the transparency while ensuring central bank independence. Given the difference in public sector debt levels, where debt levels are elevated, fiscal policies and active debt management would need to help bring them down decisively.

That said, amid market differences across countries, careful tailoring by country is essential. The heightened uncertainty should encourage countries also to accelerate reforms to fortify their fundamentals, including by strengthening their institutions. In addition, potential opportunities from new trade corridors can be seized by reducing long-standing trade barriers, diversifying product and markets, and improving infrastructure.

Let me conclude by saying that the Fund continues to engage closely with the region and with its members to provide policy advice, technical support, and financing. The Fund has approved more than $40 billion in financing since the onset of the Pandemic, $16 billion since the start of 2023, including to countries like Egypt, Jordan, Mauritania, Morocco, and Somalia. We have also increased our policy traction with Middle east and Central Asia countries outside programs, and we are scaling up the implementation of our strategy for fragile and conflict states. The IMF has also continued to support the region with about 350 technical assistance and capacity development projects. In fact, our capacity development budget has increased in the last two years by 38 percent, reaching $45 million in fiscal year 2024.

Again, many thanks for participating at this press conference and I would be happy to take your questions. Back to you again, Angham.

MS. ALSHAMI: Thank you very much, Jihad. We will now open the floor for questions. If you are on Webex, please turn on your camera and raise your hand. And if you want to ask a question, we will call on you, or you can post your question on Webex, in the chat box, or through the IMF Press Center. We'd be grateful if you can introduce yourself and your news outlet. If you are in the room, please raise your hand and we will turn to you.

Let's start with some regional questions. Anyone has regional question, please raise your hand. And we will go to, let's go with Ahmed. First row here, please.

QUESTIONER: Ahmad Emad from Al-Masdar Misre. My question has two parts. The first part is, if the situation remains as it is in Sudan and Gaza for longer time than this, what does the IMF think about what will happen in the coming period? The second part of the question is about Egypt. Egypt, the loan was increased from five to $8 billion. Does Egypt need more measures and procedures in the coming period? I need to know the viewpoint of the Fund, even after approval of increasing the loan to $8 billion.

MS. ALSHAMI: Let's take the gentleman here. The second row. Kyle.

QUESTIONER: Hi, Kyle Fischer with the National. Thank you for taking my question. I have a question on downside risks in MENA. Today's report says that these downside risks prevail, whereas the January report said these were resurgent. Can you just walk us through this upgrade in language for me?

MS. ALSHAMI: Thank you. Should we take one more? One more question, maybe regional? I'll take the second row here.

QUESTIONER: Thank you so much. My name is Abby from CNBC Africa. My question is in regard to Sudan building up from my brother Ahmed. We're seeing 18.3 percent GDP contraction for Sudan. As the IMF, what are some of the policy prescriptions you will be offering and what are the spillover effects that this may cause on other countries across that part of Northern Africa? Thank you.

MS. ALSHAMI: We will take these sets of questions, Jihad, and then go back.

MR. AZOUR: Thank you very much. In fact, the two first questions in fact covers somehow, somehow similar issues. I will start answering it in Arabic and then maybe I will go back to English.

No doubt, Ahmed, the developments currently seen in the region have adverse impacts on our economies. In the first place, the economies that have to do with this crisis, with the Palestinian economy and the war in Gaza, this impact differs from one country to another. And this impact also has, let's say, it's different channels, let's say, affecting the channels of economy. And the main sectors impacted are tourism, especially in the first phase, and then trade is the other sector, and the percentage of impact differs from one country to another. Then Egypt -- and due to the revenue of Suez Canal, and Iraq and Jordan also are impacted. These impacts will remain in case the crisis stays for a longer time. But there are other spillovers on the economic movement in general, in the region and the big impact also is on the movement of trade. The tensions that we see in the Red Sea have had their implications on trade, which declined by more than half, and this led to the decline of the revenues of some of the sectors. For example, we have the decline of the revenue of Egypt from Suez Canal by about two thirds, and this also led to the redirecting the flow of trade and path of trade.

This has had its implications on the countries that have their ports on the Red Sea. And these are adverse impacts, as I mentioned. That's why the title of our -- our report is that it's a period of uncertainty and this had its impacts and effects as well. This was --this would require procedures and will impact the countries that are less strong in terms of their economy. We speak about Sudan, Palestine, and other economies, such as Yemen, which are the most impacted due to their situation. And these economies that are emerging, the emerging countries, we need to follow up with these economies more closely and we can talk about the economy of each country somehow converging.

There are, of course, uncertainty and risks are the two dominant words that -- the two dominant keywords in our report for the Spring. This has led that we had to revise our projections compared to October last year because of various factors. One of them is the -- the conflict and its extension, and the other one also is the changes or the extension of the OPEC+ Agreement that has led to downward revision of our projections in oil.

There are two sets of downside risks. The one that grew recently is the regional set of downside risks. But there are also global downside risks. Among the regional downside risks, of course, the current war and the risk of its extension and the instability that it could create is one important element. The issue on trade and trade disruption is also a negative factor that could have impact on some of the countries who are on the trade routes and could have a trade or current account impact, but also fiscal impact. There are also other type of risks that are coming from regional -- sorry, from climate issues. We saw last year, certain number of climate events, and therefore this is also an additional factor that could become, if materializes, a negative impact. But also there are international potential downside risks. The fragmentation and the extension of the tension that could exist on trade could affect both Middle East and Central Asia. And any change in the global environment could also have an impact, both in terms of economic activity, especially given the linkages between the region and some of the key economies like Asia, but also the impact on interest rate.

MS. ALSHAMI: Let's take. Oh, sorry.

MR. AZOUR: I have question on Sudan --

MS. ALSHAMI: Sudan, yes.

MR. AZOUR: -- and on Egypt. Maybe I can cover them later when we cover the regional issues?


MR. AZOUR: I'll go back to those.

MS. ALSHAMI: Yes, the country issues. Let's go back maybe now to Egypt, and we already have a question from Ahmed on the reforms for the next period. Let's take a question from here at the front. Ahmed?

QUESTIONER: Hi everyone, my name is Ahmad Yaqub. I'm the Managing Editor of Al Youm Sabah Egyptian newspaper. I have two questions. My first one is about how do you evaluate the current phase of the reforms in Egypt in terms of unification of exchange rate, which the Egyptian government talk about the last period and upcoming trench of the new IMF deal? This already take our first tranche from the new deal about $8 million -- $80 million or $800 million U.S. dollar. What about the total amount of the nexus trench and necessary all the highly important measures? Should the Egyptian government take to maintain macroeconomic stability? Thank you.

MS. ALSHAMI:: Thank you, Ahmad. Maybe we'll take one question on Webex. And we will turn to Dua on Egypt. Dua?

QUESTIONER: Hello, Angham.

MS. ALSHAMI: Hello. Hi, Dua.

QUESTIONER: Thank you for taking my questions. Good afternoon for all my colleagues. Good afternoon, Jihad. Pleased to join you today. Actually I have a couple of questions on Egypt, particularly. At the Rio Strip, the Red Sea disruption war in Gaza and oil production cuts will feed the debt level in the MENA region. What are the Funds projections for the overall debt and external debt in the country? As you mentioned, Red Sea disruptions have negative impacts on the MENA’s economies, so what for Egypt’s in terms of the [IM-EX] inflows, how they will be affected? My third question is how Egypt is working on managing the debt path under the EFF Loan Program. And today, the Managing Director of the IMF stated that the IMF leaves a room for Egypt to manage the or to protect the local currency. To what extent Egypt is, let's say, is allowed to interfere, in case of outperformance of the Egyptian pound? Thank you, Jihad.

MS. ALSHAMI: Should we take more questions on Egypt or --

MR. AZOUR: I will move to Egypt now, okay?

MS. ALSHAMI: Yes. We have actually one question that we received online on Egypt. How can Egypt face the additional challenge of regional tensions close to its borders, when the economy is still fragile at the beginning of a new reform process? And then we have one more question from -- this was from [Sadal Isawi], from Al-Ahram. We have a question from Fatima Brahim.

QUESTIONER: In light of the tensions between Israel and Iran, how does it impact the Egyptian economy in light of the recent development after floating the currency in the country?

MS. ALSHAMI: Let's stop maybe here for Egypt?

MR. AZOUR: Okay. On Egypt, I will move from English to Arabic and from Arabic to English, because several questions were asked in Arabic and then others, but are related, asked in English. Let me start with the first question from Ahmad.

Would like to remind you that the two reviews have been approved a few weeks ago. And this review, the aim of it was to tackle the imbalances that were existing in the Egyptian economy, and there was a set of procedures that were taken. These were fundamental. What we call the package, that was approved for disbursement of the first and second tranches. These took into consideration the development, the regional developments, and their impact on the Egyptian economy. And therefore, we looked again into the loan that was improved from $3 to $8 billion. So, we taking into consideration also the positive development that have been witnessed in regards to the improvement of investments.

What are the main procedures to be taken that we will build on in the coming period? Protect the Egyptian economy from the external shocks, such as using the exchange rate in order to protect the economy. This is one tool and this has proved to be a positive development, because after taking this decision, we have seen activity, we have seen the flow of capital, and we saw that private sector has been able to get foreign currency that will enable it to assume its role and will be able to enlarge the size of the economy. This is the first part and that needs to be continued, and also other countries. It's very important in order to maintain stability to allow for the exchange rate to be flexible. That also protects against shocks and it protects against the need to have more costs that the economy bears. So, the exchange rate should be reflected and should reflect the price, the real price.

And then also tackling the issue of inflation. Inflation due to the increase of the inflation rate, it has been declining in countries of the world and of the region. This is an important issue to tackle. It influences the economic stability in Egypt and has its social cost, very high social cost, and tackling inflation is a main point in the review. And the central bank has taken the necessary procedures in this regard.

There are two main elements and I would like to add them. The first one is benefiting from this momentum in order to accelerate the process of economic transformation -- Egypt economic transformation, in order to give the private sector a bigger role. The Egyptian economy is very large and has very huge potential. So enhancing the role of the private sector is a priority in order to give a momentum to the economy and to give it a push, so that all the youth in Egypt will benefit from that. There is a need to redesign the door -- the role of the public sector because it has been a catalyst and to have a role, not to compete with the private sector, and also to look again into some of the investment projects, the huge projects, in order to give a clearer vision and more transparency and disclosure about the spending of the public sector. These are the main elements not only to attract investment, but also the reactions were positive by the investors and also by the private sector in Egypt.

These are the steps that have started. So there will be a follow up for these procedures through the coming review. So we work closely with the Egyptian authority in order to complete these basic and fundamental reforms in order to increase growth, as we see in our projections, to continue to lessen or to disinflation, and also provide social protection for the vulnerable -- vulnerable groups.

The tranche is dispersed when it is approved. So the Executive Directors, when they have their approval, we understand that this has been adopted or approved by the Executive Directors. For what I said in Arabic can be also the same in English.

MS. ALSHAMI: Maybe before we move on to other countries, let's just go back to Sudan and see if there are other colleagues who would like to ask about Sudan. Let's turn to Daniel. And please, just as a reminder, wait until the microphone comes to you so other colleagues and others online can hear you. Daniel, go.

QUESTIONER: Sure. Hi, Daniel Davis, AFP Press. Just a very quick follow up to the question that was asked before. I noticed in your projections you're expecting the war to end in mid-2024, or at least the projections are premised on the idea that the war will end in mid-2024 and Sudan will reengage with the international community. I just wonder, given that we're sort of two thirds of the way to the middle of the year now, how likely you think that is and what the economic impact might be were that not to happen? Thank you.

MR. AZOUR: We're talking about Sudan?


MS. ALSHAMI: Any other questions on Sudan? Okay, we have one more online question on Sudan from [Noor Sharq].

QUESTIONER: Georgieva said this morning that we should not overlook Sudan. Are there new programs for Sudan that can be approved?

MR. AZOUR: I think we are all really preoccupied and saddened by the recent development in Sudan. It has been a huge suffering for the population of Sudan with the escalation of the conflict and its impact on the humanitarian situation, the number of people who are in need of food assistance, the number of displaced, as well as also the hardship that the Sudanese are facing is one of the most challenging crises that the country has gone through and one of the most challenging situation in the region. Therefore, this is an issue that is preoccupying us. In terms of what the Fund is doing, let me go one step back.

The Fund has been very much engaged with Sudan in the past through the largest debt relief operation. Two years ago, we were able to achieve what we call decision point, whereby the whole donors and the international community came together in order to help Sudan deal with a $56 billion of debt in arrears. And the plan was gradually to move into a situation where, as we did in Somalia last December, we reach what we call the Completion Point and Sudan will have its share of international support and debt relief. Unfortunately, the situation has dramatically changed and although we are still engaged with the authorities in order to understand the impact of the crisis, it's very difficult for any organization, including humanitarian organizations these days, to be able to operate for a ceasefire and improvement of the situation and then to be able to re-engage under those conditions. We will be ready to reengage and take the process that we have started of helping Sudan deal with its, on one hand, the debt situation, but also the situation of reconstruction and humanitarian situation.

MS. ALSHAMI: Thank you, Jihad. Let's take the next set of questions. We'll go to the gentleman in the front here, please. Shahzad.

QUESTIONER: Hi, I'm Shahzad from Jia News Pakistan. Pakistan has gone to IMF more than 20 times. And every time Pakistan goes to IMF, the authorities promised that this will be the last time. So in your view, why has Pakistan not been able to end the reliance on IMF? And also, what are the policy decisions and reforms Pakistan must take before the new program? Because Pakistan is facing high growth. Sorry, low growth, high inflation and high debt scenario right now.

MS. ALSHAMI: Thank you. Let's take more questions on Pakistan, if we have more. Gentlemen in the front, please.

QUESTIONER: Hi, my name is Asad. I'm from Voice of America. And I had two questions on Pakistan. What size of program can help fix Pakistan's economy stabilize? And the second would be what key leap hole, key loopholes Pakistan's economic policies have at this point, which are keeping the country's economy behind in comparison to the peers or in the region?

MS. ALSHAMI: Do we have more questions on Pakistan? Okay, we can take it.

MR. AZOUR: Thank you very much. Let me first start by saying that a current program that has been initiated ten months ago allowed Pakistan to achieve a certain number of important milestones in terms of economic stability. The last review was successful and will be put forward to the board, which will end a program that helped Pakistan address acute economic imbalances and maintain its economic stabilities. Those measures also allowed Pakistan to increase its buffers. Currently, the authorities have expressed interest in a new program in order to help Pakistan address some of the key challenges. And what are those challenges?

One is to preserve macroeconomic stability and this would require to continue the work on fiscal side in order to reduce the level of budget deficits, strengthen the fiscal situation by improving the revenue situation, which was one of the main challenges in the past. Increasing revenues will allow the government not only to address debt situation but also to have the room to provide additional social support. The second pillar is the reform of the energy sector. And this is a priority that, yes, has been there for some time, but it's still an important reform dimension for Pakistan. Three is to increase the potential of this economy to grow. Pakistan is a large economy with a large potential. Leveling the playing field, improving business environment, allowing the private sector to be having more space internally and also on the export side will help Pakistan.

Those are the key pillars that Pakistan would need in order to improve its situation and the Fund is ready to support. And I would say the package of reform is now more important than the size of the program because we saw recently that the right measures provided the right response. Markets reaction was positive. We saw additional inflows; reserves have been rebuilt at the level of the central bank and even growth prospects have improved. Therefore, I think what is important at this stage is to accelerate the reforms, double down on the structural reforms in order to provide Pakistan with its full potential of growth. Yes, we have had several programs, but the priorities are still there and therefore the Fund is ready to assist when the government asks for that. And I think also bilateral partners of Pakistan are looking forward for program to extend their additional financial support to Pakistan.

MS. ALSHAMI: Thank you, Jihad. So let's open the floor for more questions. Laman, in the front please.

QUESTIONER: Thank you for taking my question. Laman Zinalva from Azerbaijan Based Trend News Agency. So in the light of possible energy crisis amid the ongoing conflict in the middle, is how should Caucasus countries and especially Azerbaijan and also central Asian countries position themselves in order, on the one hand to ensure energy stability and energy security in broader regions, and on the other hand also to maintain their financial stability? Thank you.

MS. ALSHAMI: Thank you very much. Do we have any more questions on Central Asia? Maybe? Let's take your question.

QUESTIONER: Thank you for taking my question. Julian PK, the Africa report in Jeune Afrique. So this is a question about Egypt, but it's broader as well. Back in October, Egypt became the first country to sign a debt swap program agreement with China. I think it was for $100 million worth of development loans. I was hoping you could talk a little bit about the progress on that deal and whether it could be model for tackling Chinese debt for the developing countries in the region? And more broadly, what kind of progress are you seeing in terms of debt restructuring for MENA countries, particularly given the new proposed reforms to the IMF's lending for arrears, official arrears, policy that would allow lending to countries even when there's no debt relief with specific bilateral creditors such as China? Thank you.

MR. AZOUR: Sorry, you were talking about Egypt?

QUESTIONER: Well, Egypt specifically the debt swap program that they signed, I think it was back in October with China.

MR. AZOUR: I'm not aware of that.

QUESTIONER: Anyway, it's very specific to development loans.

MR. AZOUR: Okay.

MS. ALSHAMI: Maybe related question on debt and Egypt. How is Egypt working on managing the debt path under the EFF loan program? And as the REO stressed, the Red Sea disruption, war in Gaza and oil production cuts will feed the debt levels in the MENA region. What are the Funds projections for the overall debt and external debt in Egypt? These were questions raised by Doaa earlier.

MR. AZOUR: Okay. The first question is on Caucasus and Central Asia. I think here I would divide my question, your question into two. One, the prospect for Caucasus and Central Asia and the energy dimension. Clearly, Caucus and central Asian countries have been able to weather the various shocks in the last few years and preserve healthy level of growth. Despite a slight, I would say, revision down this year, we expect growth to pick up next year. As I mentioned in my introductory remarks. Also Caucasus and central Asian countries have been active in adjusting to the various transformations that the global economy is facing, including the geo economic fragmentation and changes in trade routes, and responding to that individually as countries, but also collectively.

This leads me to your second question on energy too. Also, we saw after the war in Ukraine, countries in the CCA also providing support in order to cover for the lack of access to energy, especially for Europe. The energy market is still well supplied and the level of capacity that exists is still there. Therefore, even if the system is going through certain number of shocks, we don't foresee any problem on the supply side. Of course, when you have those security or geopolitical events, we are seeing certain level of, I would say, volatility in the markets, some tension in certain cases, but broadly speaking, the market has proven to be able to adjust and to provide supply to cover for the shortages that exist.

The second question is on debt for Egypt. We have two questions. One is yes, debt is expected to start declining starting from next year. We expect that to move from 92.4 percent this year, 2024 as debt to GDP to 82.6 percent and the trend should be downward. And this is also one of the main pillar of our program with Egypt, is to allow Egypt gradually to reduce the burden of debt, the size of debt to the GDP, but also the debt service. The increase in interest rate globally has led to increase of debt service for several of emerging and middle income economies. And our recommendations, especially for countries in the region to address this issue decisively and to move forward with the needed reforms that will allow risk premium to go down and also reduce the nexus of the burden that debt could have on the local financial system.

When it comes to debt and debt restructurings, I don't think that Egypt entered into this classification. Of course, there are certain number of countries who have high level of fragility to that. And the Fund, as you know, since 2020 has developed various instruments to help those in our part of the world. We helped Somalia go through the whole way of getting to a debt relief that represented around 85 percent of GDP in terms of relief and external debt. And we are helping Somalia going forward now with a new funded program. We are also working with other countries who have unsustainable debt situation, like Yemen and other countries, in order to help them on country-by-country basis.

MS. ALSHAMI: Thank you, Jihad. Maybe let's turn to the room one more time. The gentleman in the front there.

QUESTIONER: Hi, my name is Magnus Sherman, I'm with Reorg. I want to turn to Egypt again.


QUESTIONER: Egypt spends around 55 percent of its entire government budget on debt service. And still the IMF last month talked about preserving debt sustainability. So to me that sounds like the Fund thinks that it is sustainable at the moment. Could you just explain how 55 percent is sustainable?

MS. ALSHAMI: Thank you.

MR. AZOUR: So you're mentioning the ratio of debt over GDP, or the part that is dedicated to debt service?

QUESTIONER: The percentage of total budget spending used on –

MR. AZOUR: Maybe you're referring the debt service to the revenues. Budget revenues?

QUESTIONER: No, it's on all budget expenditures.

MR. AZOUR: I'm not sure that the debt service in terms of interest payment equivalent to 55 percent. Anyway, we will give you the numbers. Those are not the numbers that are in terms of the debt service. The debt service is much smaller. It's not 55 percent of GDP or the budget.

QUESTIONER: No, I'm not saying GDP. I'm saying the total Egyptian budget, 55 percent of that is currently spent on debt service.

MR. AZOUR: Well, it's not this number, but anyway, I think you are raising an important point, which is the burden of debt service on public finance in the case of Egypt and in the case of other countries. And this is also one of the priorities when we are in a situation of high interest rate. This is why we encourage countries to address and decisively reduce the size of debt and also reduce the risk premium that increase that service.

Yet in the case of Egypt, gradually we expect, with the implementation of the program, improvement of the overall balance sheet of the state, increase in inflows that Egypt will be able to reduce and to pay back part of its debt. And this latest investment that we expect will be followed by other transactions that will help reduce the stock of debt added to the fiscal consolidation that will help improve the primary balance of the budget. And the improvement in the overall interest environment or risk environment will help Egypt gradually reduce both its debt service but also the overall size of the debt compared to the GDP.

MS. ALSHAMI: Thank you, Jihad. Maybe let's turn to other countries and we'll turn to Webex. This is the last round of questions because we're running out of time. Mohammad, very quickly please. If you can ask your question on Webex. We can't hear you, Mohammad, you're on mute. If you can unmute, please. Yes.

QUESTIONER: Clear? Yes, Mr. Jihad. As I noticed from the report, the IMF expects for Jordan a growth of 3 percent against 2.6 percent this year. On what basis did you base your projections in light of the war right now? And how can Jordan reduce the debt under the current program with the IMF?

MS. ALSHAMI: What is the role of Jordan in promoting the stability of Jordan under the geopolitical circumstances and other new programs in order to face the situation?

MR. AZOUR: For the first question, Jordan managed through a group of measures last year and basic reforms that was approved by the authorities to improve the situation in Jordan. And this reduced deficit and protected the economy. And this reflected in the improvement of the ratings, the credit ratings for Jordan. On the second point, yes. The basic point for Jordan is to work on reducing public debt to GDP. And this requires to preserve the stability of the financial situation through reforms and of course the economy of Jordan. And the question that you raised on and growth projections, this has been affected of course, by the war in Gaza and tourism was affected. And also, the trade and shipping and the activity in the Akaba Port. Of course, the reforms that Jordan made improved growth despite the risks and the uncertainty of the regional risks right now.

On the other, how the Fund contributes to supporting stability. As you know, the Fund approved a program at the beginning of this year. This had been prepared for a long time before this year in order to support Jordan's strategy to promote growth and to develop the economy. And as has happened in 2020, there was a program that was approved for Jordan and also this year. This program helps promote several elements of economic stability. First of all, it emphasizes the Fund’s support of Jordan, and it allows it to raise external support as well. In addition to the Funds program, there is an international support that is necessary to help Jordan, especially to help with the refugee’s problem. This is not only humanitarian issue that is difficult, but it's also exhausting for the budget of Jordan.

MS. ALSHAMI: Thank you all for being here and for joining us today. Thanks very much for your interest and we hope to see you soon. If you have follow up questions, please feel free to reach out to me directly or to media at Thank you all very much.

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