{
  "title": "Egypt: A Path Forward for Economic Prosperity",
  "publication": "IMF News, July 24, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity",
  "canonical": "https://www.imf.org/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity",
  "overlayPath": "/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/index.md",
  "summary": "<span>Egypt&rsquo;s economic reforms have helped strengthen growth, reduce unemployment, increase foreign exchange reserves, and put public debt on a downward path. The reforms, supported by a US$ 12 billion <a href=\"https://www.imf.",
  "publishDate": "2019-07-24",
  "sections": [
    {
      "heading": "Program objectives and context",
      "content": "- Addressed significant macroeconomic imbalances that had built up by 2016 due to:\n  - Large budget deficits, loose monetary policy, and a fixed exchange rate.\n  - Drastic reduction in foreign exchange reserves, high inflation, and unsustainably high public debt.\n  - Falling growth and rising unemployment, especially among women and youth.\n- Immediate priorities:\n  - Restore macroeconomic stability and avoid a crisis.\n  - Move to a flexible exchange rate to restore equilibrium in the foreign exchange market and eliminate the shortage of foreign exchange.\n  - Rein in the budget deficit via a three-year plan; deficit was \"at over 10 percent of GDP\".\n  - Tighten monetary policy by raising interest rates to reduce public debt as a share of GDP and limit inflation.\n  - Address extensive fuel subsidies that made fuel in Egypt \"one of the cheapest in the world\" and disproportionately benefited the well-off."
    },
    {
      "heading": "Program design and social protection",
      "content": "- Supported by a US$ 12 billion EFF arrangement from the IMF.\n- Fiscal space from subsidy reform was reallocated to:\n  - Better-targeted social spending.\n  - Investment in health, education, and public infrastructure.\n- Social spending measures:\n  - Expanded modern cash transfer programs to those most in need.\n  - Takaful and Karama (Solidarity and Dignity) expanded from about 200,000 households to 2.3 million households, covering 10 million people.\n  - These programs were designed to ensure the poor did not bear the costs of economic adjustments and to sustain public support for broader reforms."
    },
    {
      "heading": "Main achievements and macroeconomic outcomes",
      "content": "- Achieved the program’s key objective: macroeconomic stability to attract investment, raise growth, and create jobs.\n- Reported outcomes:\n  - Current account deficits have fallen.\n  - Foreign exchange reserves are at all-time high levels.\n  - Growth recovered from \"around 4 percent\" to \"5.5 percent now\", and \"is expected to reach 6 percent by next year\".\n  - Unemployment has fallen \"below 9 percent\" to its lowest level in over a decade.\n  - Public debt has begun to decline.\n  - Inflation has fallen steadily—\"on track to reach single-digits by next year\".\n- Structural and competitiveness improvements:\n  - Fuel subsidy reform improves price signals and resource allocation, encouraging private investment into more labor-intensive sectors.\n  - Reforms in competitiveness, public procurement, and transparency of state-owned enterprises aimed to improve government effectiveness and modernize the economy for greater participation in global trade."
    },
    {
      "heading": "Policy priorities going forward",
      "content": "- Two overarching priorities:\n  - Cement the gains in stabilizing the economy.\n  - Accelerate reforms to make the private sector the engine of growth.\n- Specific policy directions:\n  - Preserve the cushion of foreign exchange reserves by maintaining a flexible exchange rate.\n  - Keep inflation on the decline and continue reducing public debt to create more room for investment in health, education, and public infrastructure.\n  - Transition the economy toward being increasingly market-oriented, with the state acting as a facilitator rather than the driver of growth.\n  - Promote private sector-led job creation: Egypt needs \"at least 700,000 new jobs annually\" to absorb its young and growing population; these jobs \"can only come from the private sector.\"\n\nIMF News — July 24, 2019\n\n---\n\n\n References\n\n- https://www.imf.org/en/News/country-focus\n- PRESS CENTER\n- EFF arrangement\n- Fifth Review Press Release\n- Egypt and the IMF\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/index.md)",
    "[Structured JSON version](/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/index.json)",
    "[Bundle manifest](/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/bundle-manifest.json)",
    "Published: July 24, 2019",
    "Addressed significant macroeconomic imbalances that had built up by 2016 due to:",
    "Immediate priorities:",
    "Supported by a US$ 12 billion EFF arrangement from the IMF.",
    "Fiscal space from subsidy reform was reallocated to:",
    "Social spending measures:",
    "Achieved the program’s key objective: macroeconomic stability to attract investment, raise growth, and create jobs.",
    "Reported outcomes:",
    "Structural and competitiveness improvements:",
    "Two overarching priorities:",
    "Specific policy directions:",
    "[https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[EFF arrangement](https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/20/56/Extended-Fund-Facility)",
    "[Fifth Review Press Release](https://www.imf.org/en/News/Articles/2019/07/24/pr19300-egypt-imf-executive-board-completes-fifth-review-under-arrangement-under-eff?sc_mode=1)",
    "[Egypt and the IMF](https://prd-sitecorecm.imf.org/en/Countries/EGY/Egypt-qandas)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/index.md",
    "json": "/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/index.json",
    "bundleManifest": "/en/news/articles/2019/07/24/na072419-egypt-a-path-forward-for-economic-prosperity/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-25T23:00:50.240Z"
}