Egypt goes against IMF advice, boosting public investments
The International Monetary Fund is keen to reduce Egypt's investments in the country in favor of private investment, but the new government has decided to increase the amount it will spend.
CAIRO — Egypt’s parliament gave its vote of confidence to the new government July 24, signifying its approval of new Prime Minister Mostafa Madbouli, Cabinet members, and the government's social, economic and political policy statement.
This program, however, stirred wide controversy as Finance Minister Mohammed Moaet announced July 5 that the government will increase its investments to 100 billion Egyptian pounds ($5.6 billion) from 70 billion pounds ($3.9 billion) in the 2017-18 fiscal program.
The increase directly contradicts International Monetary Fund (IMF) recommendations for Egypt's economic reform program, which say the government should reduce its investment role and expand the private sector's contribution. The IMF approved a $12 billion loan to the Egyptian government in November 2016 to finance the economic reform plan.
Asked to comment on Egypt’s government investment expansion, Subir Lall, head of the IMF mission to Egypt, told Al-Monitor the IMF believes the private sector can grease Egypt's economic wheels, achieve rapid growth and provide job opportunities.
