To describe the framework for Egypt’s medium term economic vision and outline the concrete policies, programs and projects that will guide and operationalize the growth strategy, Egypt prepared this Five-year Macroeconomic Framework and Strategy to be implemented within the 2019. The government’s vision aims at creating a productive and efficient economy that generates high, sustainable and inclusive growth through a new reform agenda that combines pro-growth and pro-private sector policies with social protection and jobs-focused priorities. The broad targets to achieve are: (i) sustainable real GDP growth reaching at least 6% by the end of the period; (ii) a faster pace of job creation in order to bring the unemployment rate below 10% and in particular to address the high rate of youth unemployment; (iii) greater efficiency in government spending in parallel with a planned reduction of the fiscal deficit and the government debt; (iv) headline Inflation within a 6 - 8% range; (v) higher rates of domestic investment; (vi) improved export performance; (vii) the development of the country’s human resources supported by increased spending on health, education and Research and Development as mandated by the Constitution; (viii) enhanced productivity on the national level and continued investment in and upgrading of infrastructure, also with the partnership of the private sector (through a PPP program). The Government identifies three policy channels to achieve the objectives: 1) fiscal consolidation, 2) prudent monetary policy and 3) legislative reforms. Fiscal consolidation will narrow the deficit and reduce debt while creating room to shift resources from wasteful spending to social programs and productive sectors through making the tax regime fair, equitable and pro-growth, widening the tax base; and improving tax buoyancy. Monetary policy will seek to control and gradually reduce inflation in the medium term to improve real incomes and enhance external competitiveness, while maintaining an active and orderly foreign exchange market that reflects supply and demand. Finally, the government is committed to creating an attractive, predictable, fair and internationally competitive business environment enhancing the domestic investment environment through an active and wide-ranging process of legal and regulatory reforms. The Strategy aims also at fostering an inclusive growth, with new tools geared to reaching the most vulnerable segments of the population. To achieve the promotion of social justice, the government strategy will rest on two main channels: (i) short-term social protection to address the most pressing needs of the population and mitigate the impact of fiscal consolidation efforts for the most vulnerable segments of the population; and (ii) long-term human capital development to empower the poor and enable them to directly benefit from economic growth. Many sectors are involved in the action plans, such as: housing and utilities, agriculture, tourism, transportation and logistics, information and communication technologies, manufacturing, oil and gas, power production and mining. To help eliminate hunger, the Government programs for a new bread subsidy scheme and ration cards to purchase a wide range of commodities, including poultry, fish and meat at government and other grocery stores. To reduce rural poverty, the Strategy to balance the medium-term fiscal adjustment with social justice priorities aims at reinvesting the 50% of the proceeds from the property tax toward the improvement of living conditions in urban and rural slum areas.
Egypt · 2015-03-15