IMF Mission Chief Interview, Sinai attacks tops coverage on the airwaves
The only exception worth noting was Lamees Al Hadidi’s interview with IMF MissionChief to Egypt Subir Lall, who told the talk show host that the IMF is preparing its report and recommendations for Egypt after reaching a staff-level agreement with the government to disburse the next USD 2 bn tranche of the USD 12 bn Extended Fund Facility. The IMF’s executive board is expected to approve the review late next month, but no specific date has been set for the discussion, according to Lall. Finance Minister Amr El Garhy has said on multiple occasions that the disbursal is coming in December.
Lall sang the praises of Egypt’s monetary policy, saying he expects annual inflation willdrop noticeably in November and December and will continue on a steady downwards path to reach single digits by 2019. “On the monetary policy side, we have seen inflation now coming down for the past three month since the peak in July… now when we look at the inflation, it is clear and that happened because of the CBE’s monetary policy stance that was effective in creating a disinflationary path,” he said.
Lall continued to justify high interest rates as a necessary tool to address inflation, saying that interest rates can only be brought down once fiscal deficit and debt levels are reduced. We continue to respectfully — and vociferously — disagree.
The state’s fiscal position is also showing improvements and is on track to register aprimary surplus, excluding interest payments from this year, Lall said. He noted that social welfare programs, particularly cash transfer programs such as Takaful and Karama, have been expanded to cover nearly twice as many households over the past year. Moving forward, the government must continue to push on the fiscal policy side of the equation to bring the deficit to 5.5% over three years while ensuring it has the necessary resources for social welfare, health, and education programs.
The fund is not overly worried about debt levels as long as Egypt’s fiscal consolidationremains on track, Lall said. The biggest worries: External factors such as international oil prices and regional security. “But we know that Egypt has a strong track record in the implementation of policies and it has as well strong credibility in international financial markets,” Lall added.
Over on Masaa DMC, Cabinet spokesman Ashraf Sultan told Eman El Hosary that the North Sinai governor is responsible for issuing compensations to the families of individuals who were killed or injured in Friday’s terror attack. The compensation has been set at EGP 200k for each victim killed and EGP 50,000 for those who were injured. The government will also provide affected families with food assistance and psychological support for three months. Cabinet is also working on a strategy to develop the Bir El Abd area that will include improving infrastructure and services, in addition to creating job opportunities for the locals, Sultan said (watch, runtime: 3:44).
Development as a means to combat terrorism continued to be the running theme on KolYoum. Tahya Misr Fund Executive Director Mohamed Ashmawy told host Amr Adib that the fund has allocated EGP 185 mn for the development of Bir El Abd, but needs another EGP 215 to complete these projects. The area is in need of ambulances, medical equipment, and new water wells, in addition to the development of its schools. Ashmawy also said the fund will work to secure a stable source of income for families whose breadwinner was killed in Friday’s attack (watch, runtime: 5:28).