Egypt has made significant progress on the economic front but still has a long way togo, the IMF will say today in its Regional Economic Outlook on the Middle East and Central Asia report, Al Borsa reports based on what it says is a leaked copy of the report due to be released at 8:00am today. Egypt needs to bolster its reserve ratio to be better equipped to handle its current economic challenges, but more importantly, the government needs to come up with a strategy to fight inflation, which crossed the 30% barrier earlier this year, the report will allegedly say.

IMF sees inflation averaging 24.8% this year, up from previous forecast of 22%:Planned legislative and fiscal reforms are expected to put downward pressure on inflation, but the IMF is now predicting we’ll see an average of 24.8% this year, up from its previous estimate of 22%. The institution sees inflation cooling to 11.6% in 2018. Central bank interest rates are one way to fight inflation, but a more restrictive fiscal policy might affect loan growth this year, the report warns.

Oil prices are a double-edged sword: Expected increases in global crude oil prices might also make it difficult for the government to maintain its high rate of spending on further development as well as subsidies. Oil imports are also expected to increase by 30% this year compared to the previous one, the report states, warning that further increases might lead to greater austerity measures. On the other hand, higher oil prices worldwide might increase foreign currency inflows through remittances and foreign investment.

Exports growing: Revenues from exported goods and services are expected to reach USD 39.1 bn this year and grow to USD 43.9 bn next year, while imports are expected to stand at USD 69.9 bn and grow to USD 72.8 bn next year. The country’s current deficit is also seen shrinking to 5.3% from 5.6% last year, before falling to 3.9% next year.

Enhance competition: Egypt has also taken great strides on the structural reforms and infrastructure development front, but needs to place more emphasis on encouraging healthy competition.

The full IMF report will be available for download hereat 8am CLT (10am Dubai time) today.