{
  "title": "Press Release: IMF Approves 24-month Stand-By Credit for Egypt",
  "publication": "IMF News, October 11, 1996",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9650",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9650",
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  "summary": "The International Monetary Fund (IMF) approved a 24-month stand-by credit for Egypt equivalent to SDR 271.4 million (about US$391 million).",
  "publishDate": "1996-10-11",
  "sections": [
    {
      "heading": "Approval and key financial terms",
      "content": "- The International Monetary Fund (IMF) approved a 24-month stand-by credit for Egypt equivalent to SDR 271.4 million (about US$391 million).\n- In view of Egypt's present strong international reserve position, the Government does not intend to draw on the stand-by credit.\n- Egypt's quota in the IMF is SDR 678.4 million (about US$976 million); its outstanding use of IMF credit currently totals SDR 16.35 million (about US$24 million)."
    },
    {
      "heading": "Background and recent macroeconomic performance",
      "content": "- Since 1991, Egypt implemented wide-ranging macroeconomic stabilization and structural reform measures, supported by two successive IMF credits.\n- Real GDP growth accelerated to over 4 percent in 1995/96 from virtual stagnation in 1991/92.\n- The rate of inflation declined to 7 percent from over 21 percent.\n- The overall balance of payments remained in surplus, with net international reserves currently equivalent to about 17 months of imports.\n- External debt dynamics:\n  - Ratio of external debt to GDP fell to 47 percent in mid-1996 from about 75 percent in 1991/92.\n  - Debt service ratio declined to about 11 percent of current account receipts (excluding official transfers) from 14 percent in 1991/92.\n- Performance under the three-year program supported by the 1993 credit fell short of Egypt's potential, particularly on structural reforms."
    },
    {
      "heading": "Medium-Term Strategy and the 1996-98 Program (objectives and fiscal stance)",
      "content": "- Principal medium-term challenge: increase economic growth to create employment for a rapidly growing population and raise living standards.\n- Program focus: consolidate macroeconomic stabilization gains and broaden structural reform agenda (privatization, deregulation, trade liberalization, fiscal and financial sector reform).\n- Program targets for 1996-98:\n  - Real GDP growth: further increase to about 5 percent in 1997/98.\n  - Inflation: further decrease to about 6 percent.\n  - External position: maintain a viable external position; external current account projected to shift from approximate balance in 1995/96 to a deficit of about 1 percent of GDP in each program year.\n  - Employment: increase in growth rate expected to create some 400,000 new jobs a year.\n  - Investment and savings: rise of about 2.5 percentage points relative to GDP over the program period.\n- Fiscal target for 1996/97:\n  - Overall budget deficit will be reduced to 1.1 percent of GDP, excluding privatization receipts and any further debt relief.\n- Demand management: other demand management policy elements will continue to be restrained to reduce inflation and maintain a sound external position."
    },
    {
      "heading": "Structural reforms (measures and objectives)",
      "content": "- Central goal: fundamental change in ownership structure to expand the private sector (public enterprises account for about one-third of manufacturing, half of investment expenditure, and about 15 percent of total employment).\n- Planned measures over the next two years:\n  - Significant divesture of nonfinancial public sector enterprises.\n  - Further liberalization of international trade, including further tariff reductions and elimination of quantitative restrictions.\n  - Fiscal revenue reforms:\n    - Transformation of the general sales tax into a value-added tax (VAT).\n    - Rationalization of the income tax to make it simpler, broader based, more transparent and equitable.\n  - Medium-term program to improve the civil service.\n  - Acceleration of financial sector reform, including privatization of banks and insurance companies, and further strengthening of banking supervision.\n  - Administrative reforms to reduce bureaucracy and red tape, including preparation of a unified investment law to simplify investment regulations."
    },
    {
      "heading": "Addressing social needs",
      "content": "- Government commitments:\n  - Improve health and education systems by increasing the number of qualified personnel such as nurses and teachers.\n  - Meet these needs within a comprehensive civil service reform program aimed at eliminating bureaucratic impediments, improving government service efficiency, and building a cadre of well-paid and efficient civil servants.\n  - Strengthen the social safety net while improving its targeting.\n- External support:\n  - Foreign donors are increasing support of the Social Fund for Development to facilitate assistance to displaced workers through compensation pay, retraining, and redeployment."
    },
    {
      "heading": "The challenge ahead",
      "content": "- The juncture is seen as propitious for a reinvigorated economic reform program.\n- Continued structural reforms are necessary for Egypt to meet new international challenges and exploit its considerable potential."
    },
    {
      "heading": "Egypt: Selected Economic Indicators (values as presented)",
      "content": "- Real GDP growth (Percent change):\n  - 1991/92: 0.3\n  - 1992/93: 0.5\n  - 1993/94: 2.9\n  - 1994/95: 3.2\n  - 1995/96: 4.2\n  - 1996/97: 4.5\n- Consumer prices (end of period) (Percent change):\n  - 1991/92: 21.1\n  - 1992/93: 11.1\n  - 1993/94: 9.0\n  - 1994/95: 9.4\n  - 1995/96: 7.1\n  - 1996/97: 6.2\n- Overall fiscal balance (deficit-) (excluding official grants) (Percent of GDP):\n  - 1991/92: -5.0\n  - 1992/93: -3.5\n  - 1993/94: -2.1\n  - 1994/95: -1.3\n  - 1995/96: -1.1\n- External current account balance (deficit-) (Including official transfers) (Percent of GDP):\n  - 1991/92: 8.8\n  - 1992/93: 5.6\n  - 1993/94: 0.4\n  - 1994/95: 2.7\n  - 1995/96: 0.2\n\nPreliminary.\nProgram.\nSources: The Egyptian authorities; and IMF staff estimates.\n\nPress Release No. 96/50 — IMF EXTERNAL RELATIONS DEPARTMENT, October 11, 1996.\n\n---\n\n\n References\n\n- Arab Republic of Egypt and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr9650"
    }
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    "Published: October 11, 1996",
    "The International Monetary Fund (IMF) approved a 24-month stand-by credit for Egypt equivalent to SDR 271.4 million (about US$391 million).",
    "In view of Egypt's present strong international reserve position, the Government does not intend to draw on the stand-by credit.",
    "Egypt's quota in the IMF is SDR 678.4 million (about US$976 million); its outstanding use of IMF credit currently totals SDR 16.35 million (about US$24 million).",
    "Since 1991, Egypt implemented wide-ranging macroeconomic stabilization and structural reform measures, supported by two successive IMF credits.",
    "Real GDP growth accelerated to over 4 percent in 1995/96 from virtual stagnation in 1991/92.",
    "The rate of inflation declined to 7 percent from over 21 percent.",
    "The overall balance of payments remained in surplus, with net international reserves currently equivalent to about 17 months of imports.",
    "External debt dynamics:",
    "Performance under the three-year program supported by the 1993 credit fell short of Egypt's potential, particularly on structural reforms.",
    "Principal medium-term challenge: increase economic growth to create employment for a rapidly growing population and raise living standards.",
    "Program focus: consolidate macroeconomic stabilization gains and broaden structural reform agenda (privatization, deregulation, trade liberalization, fiscal and financial sector reform).",
    "Program targets for 1996-98:",
    "Fiscal target for 1996/97:",
    "Demand management: other demand management policy elements will continue to be restrained to reduce inflation and maintain a sound external position.",
    "Central goal: fundamental change in ownership structure to expand the private sector (public enterprises account for about one-third of manufacturing, half of investment expenditure, and about 15 percent of total employment).",
    "Planned measures over the next two years:",
    "Government commitments:",
    "External support:",
    "The juncture is seen as propitious for a reinvigorated economic reform program.",
    "Continued structural reforms are necessary for Egypt to meet new international challenges and exploit its considerable potential.",
    "Real GDP growth (Percent change):",
    "Consumer prices (end of period) (Percent change):",
    "Overall fiscal balance (deficit-) (excluding official grants) (Percent of GDP):",
    "External current account balance (deficit-) (Including official transfers) (Percent of GDP):",
    "[Arab Republic of Egypt and the IMF](http://www.imf.org/external/country/EGY/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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