Answer to Question #236121 in Macroeconomics for Mohamed Farahat

Question

"The International Monetary Fund has put some conditions to address Monetary, Fiscal and Structural problems that faced the Egyptian economy."

 

Discuss the last sentence, addressing the main problems at the Egyptian economy, and Egypt Compliance with the conditions, under IMF extended Fund Facilities. 

Answer 1

When a country faces serious medium-term balance of payments problems because of structural weaknesses that require time to address, the IMF can assist through an Extended Fund Facility (EFF).

Egypt has successfully completed the three-year arrangement under the Extended Fund Facility and achieved its main objectives. The macroeconomic situation has improved markedly since 2016, supported by the authorities’ strong ownership of their reform program and decisive upfront policy actions. Critical macroeconomic reforms have been successful in correcting large external and domestic imbalances, achieving macroeconomic stabilization and a recovery in growth and employment, and putting public debt on a clearly declining trajectory.