## Egypt—Searching for Binding Constraints on Growth

_IMF Working Papers, March 1, 2007_

## Source details

**Canonical URL:** [Egypt—Searching for Binding Constraints on Growth](https://www.imf.org/en/publications/wp/issues/2016/12/31/egypt-searching-for-binding-constraints-on-growth-20523)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/egypt-searching-for-binding-constraints-on-growth-20523/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/egypt-searching-for-binding-constraints-on-growth-20523/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/egypt-searching-for-binding-constraints-on-growth-20523/bundle-manifest.json)

## Bibliographic details
- Authors: Klaus-Stefan Enders
- Published: March 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451866216.001

---

### Summary
- Since 2004 Egypt's growth has been accelerating in step with the launching of a series of ambitious reforms, reversing a trend during the preceding half-decade when Egypt's growth rate fell below that of most regional peers and well below that of the average developing country.
- The paper seeks to identify factors that held back Egypt's growth in the recent past, and explores whether recent reforms have removed the most binding constraints to allow at least a temporary growth spurt.
- Overall assessment: the Egyptian reforms launched in 2004 appear to have focused well on the most critical constraints—reducing red tape and tax rates, and improving access to foreign exchange—thereby getting a strong growth response out of a limited set of reforms.

### Key findings
- Reforms launched in 2004 produced a strong growth response by addressing critical constraints:
  - Reducing red tape.
  - Reducing tax rates.
  - Improving access to foreign exchange.
- Remaining and emerging constraints:
  - Inefficient bureaucracy remains an important obstacle to higher growth; reforms in this area should continue to have high payoffs.
  - Inefficient financial intermediation is an ongoing constraint and may already be binding.
  - High public debt is an ongoing constraint and may already be binding.
  - Improvements in education may rapidly become a critical factor for sustaining higher growth.

### Policy implications and recommendations
- Continue reforms to improve bureaucratic efficiency to unlock higher growth potential.
- Address weaknesses in financial intermediation to prevent this constraint from limiting growth.
- Implement policies to manage and reduce high public debt to avoid future binding constraints.
- Prioritize improvements in education to sustain higher growth over the longer term.

### Subject tags and keywords (as listed)
- Subject: Banking, Credit, Education, Export performance, Human capital
- Keywords: Egypt, export, product, WEF survey, WP

---

## Content in this bundle

- **Real per Capita GDP Growth**
  - [Real per Capita GDP Growth (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp0757.pdf.md){rel="alternate" type="text/markdown"}
  - [Real per Capita GDP Growth (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2007/_wp0757.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/egypt-searching-for-binding-constraints-on-growth-20523_