With economic waves from the war in Gaza spilling over in the Middle East, the IMF says it is working with Egyptian authorities to shore up its economy and foster reforms, a spokesperson for the Fund said Thursday, (December 19) in Washington, D.C.
“In light of the difficult external conditions and challenging domestic environment, the IMF staff and the Egyptian authorities agreed to recalibrate the fiscal consolidation path, and this was agreed in December, I would highlight, to create fiscal space for critical social programs benefiting vulnerable groups and the middle class while ensuring debt sustainability,” said IMF spokesperson Julie Kozack.
Kozack said the new planned loan agreement would take the form of a Resilience and Sustainability Facility, or RSF, designed in part to help countries tackling climate change, adding that she could not yet confirm how large it will be. But it would have economic reforms at its core.
“Looking forward, reform priorities comprise, lowering inflation, sustaining exchange rate, flexibility and, liberalized access to foreign exchange. In addition, the program aims to boost, domestic revenues. It aims to improve the business environment. It aims to accelerate, disinvestment or divestment, rather, and leveling the playing field between, state owned enterprises and the private sector. And of course, it also aims to enhance governance and transparency,” Kozack told reporters.
The Fund will also be ready to help Lebanon after the formation of a new government. Lebanon needs foreign funds to pay the reconstruction bill from last year’s war between Israel and Hezbollah.
“We welcome the election of, General Aoun as President of Lebanon, and we look forward to working with him and his new government to address the challenges facing the Lebanese economy. And just to remind, Lebanon continues to face profound economic challenges, and the conflict had exacerbated, an already fragile macroeconomic and social social situation. The election of the president, the formation of a new government, as well as the ceasefire are critical to support policy actions and reforms that would allow the gradual return to the normalization of economic activity in Lebanon,” said Kozack.
And an IMF team is heading to Mozambique ‘in the coming weeks’ to assess that African country’s progress on economic reforms.
“An IMF team will visit Maputo in the coming weeks, to engage with the new government. We do remain engaged to support the country's efforts toward remaining macroeconomic stability, accelerating growth, and making growth more inclusive in line with, with the arrangements. But given that there's a mission in the coming weeks, we'll have more to report,” said Kozack.
A copy of the full transcript is available at IMF.org.
