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Sunday, 14 February 2021

Last Night’s Talk Shows on 14 February 2021

The highlight of last night’s talk shows: Kelma Akhira’s Lamees El Hadidi’s extensive chat with IMF Managing Director Kristalina Georgieva on the state of (and outlook for) the global economy, progress on vaccine programs around the world, and what the fund thinks Egypt is doing right and wrong. Tap / click here for the full segment (watch, runtime: 40:56).

The “harmony” between Egypt’s fiscal and monetary policymakers earned particular praise from the IMF boss, who said swift and targeted policy responses helped shield the most vulnerable sectors from bankruptcy and crippling job losses despite the pandemic. Georgieva said the partnership between the Central Bank of Egypt on the monetary side and the Finance Ministry on the fiscal side should continue beyond the pandemic to help the economy get back on its feet.

Egypt’s economic recovery moving forward would be best served by the government continuing to provide support to sectors like aviation and tourism, while moving ahead with its economic reform program to continue narrowing its budget deficit, Georgieva said. She also encouraged the government to create a more dynamic and competitive economy across all industries, and remain engaged with the IMF to remain prepared for any future shocks.

Globally, the outlook is mixed: 150 countries are not expected to return to pre-covid growth levels this year despite the global economy beginning to grow again, Georgieva said. This uneven recovery could be balanced out somewhat if the rollout of vaccines also becomes more equitable and is sped up, with global GDP positioned to tack on USD 9 tn by 2025 if global cooperation on vaccinations improves. The majority of the extra growth would be registered in developing countries, she said. That being said, what the year ahead ends up looking like depends on the outcome of the race between virus mutations and vaccine adaptations for these mutations, whether or not policymakers continue rolling out stimulus, and the scale of international cooperation to reach an adequate level of vaccine coverage.

The world is divided into four categories as far as vaccines go, which doesn’t help the disparity in growth outlooks, the IMF boss said. There are countries with vaccines secured from multiple manufacturers and the ability to roll them out quickly; a second category of countries with one or two types of vaccines but difficulties in distribution, and therefore low vaccination rates; a third category that manufactures vaccines and has the ability to distribute them; and then there’s the lowest-income countries who have yet to get their hands on any vaccines. Georgieva pointed to a handful of African countries where no vaccines have been administered thus far.

Another major highlight from the airwaves: Vice Minister of Finance Ahmed Kouchouk talking about the state privatization program and the latest eurobond issuance Egypt took to market last month. You can watch Kouchouk’s full interview on Nile TV’s Business Insider with Ayman Salah last week here (runtime: 37:02).

The state privatization program will resume once market conditions improve, and the government has been working with the Sovereign Fund of Egypt to get the pipeline of companies in tip-top shape during the pandemic, Kouchouk said. The program is a key step towards widening the investor base in Egypt’s assets, and will help increase private sector participation in the economy.

Reducing the country’s debt-to-GDP ratio is a top policy priority for the Finance Ministry, which plans to bring the ratio down to 80% of GDP by 2024, Kouchouk said. On the debt front, he pointed to Egypt’s recent USD 3.75 bn eurobond sale, saying the lower-than-expected yields are a reflection of investor confidence in the Egyptian economy, and noted that the bonds carry longer tenors as part of the government’s shift towards longer-term debt.

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