Abstract
First Review Under the Stand-By Arrangement and Monetary Policy Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Arab Republic of Egypt
1. Twelve-month consumer price inflation rose to 5.7 percent in November from 4.5 percent in October. Higher headline inflation reflected a pickup in food prices, which rose 3.7 percent in November (y/y) after having decreased steadily since April; core inflation was little changed at 4 percent (y/y). The increase puts inflation close to the lower bound of the CBE’s target of 9 percent (±3 percentage points) for 2020 Q4.
Consumer Price Index Inflation
(percent change, year-over-year)
Citation: IMF Staff Country Reports 2021, 007; 10.5089/9781513566214.002.A002
Sources: Central Bank of Egypt; Haver Analytics; and IMF staff calculations.2. The poverty rate fell to 29.7 percent for FY19/20 from 32.5 percent in FY17/18. The largest decrease was recorded in rural areas, reflecting in part the continued expansion of the social safety net through the Takaful and Kamara programs. The rate of extreme poverty also decreased to 4.5 percent from 6.2 percent during the two-year period.
Poverty Rate
(percent, national poverty line)
Citation: IMF Staff Country Reports 2021, 007; 10.5089/9781513566214.002.A002
Source: Egypt Central Agency for Public Mobilization and Statistics, Household Income and Expenditure Survey.3. The fiscal safeguards review (FSR) mission is nearly complete.
The mission’s preliminary findings suggest that cash management and expenditure control processes are established. Controls on government cash resources are in place, embedded in a treasury single account and centralized payment authorization and execution. The legal framework provides for multiple ex ante controls at each step of the expenditure process, supported by a financial management information system covering all budget units, and frequent and timely fiscal reports are prepared. Internal audit mechanisms are at nascent stages of development within the central government—with the exception of the Ministry of Finance, where an internal audit unit started operation since 2019—and efforts are still needed to build capacity and align with international standards in this area.
However, given unforeseen delays and constraints associated with a remote mission, the completion of the FSR is expected in January 2021. The main findings will the discussed in the Staff Report for the second review. If a field visit is required to validate some of the mission’s findings, a provisional report will be issued and finalized once travel to Egypt is feasible.
