CAIRO (AP) — The International Monetary Fund offered support to Egypt's economic policies on Wednesday, after a review of its first broad consultations with authorities in Cairo since before the country's 2011 uprising that set off years of political instability.
The long-delayed assessment projected the economy to grow 4.3 percent in the fiscal year 2015/2016 and confirmed a forecast of 3.8 percent growth for the current fiscal year, which ends June 30. Growth for the previous period stood at 2.2 percent.
"Directors welcomed the improved economic outlook and supported the authorities' plans to restore macroeconomic stability and spur inclusive growth and employment," the IMF said, noting that Egypt's "starting point is difficult."
Unrest since longtime autocrat Hosni Mubarak's overthrow four years ago has battered the Egyptian economy. The vital tourism industry is a shadow of its former self and foreign investors have been hesitant to commit to what they once considered a promising emerging market.
The government has invited business delegations and heads of state from around the world to attend an investor conference in March. It is reforming investment laws in an attempt to improve transparency and slash Egypt's notorious red tape, hoping to attract the foreign capital needed to boost growth and provide jobs for a population surging toward 90 million.
Last autumn, authorities said they were hoping to attract up to $100 billion at the conference, set to take place in the Red Sea resort of Sharm El-Sheikh. Later, they said they seek to attract $10-$15 billion in investments, and more recently, officials have downplayed the idea of setting a specific monetary goal for the event.
The IMF welcomed Cairo's moves to reduce energy subsidies and the budget deficit in its latest fiscal consolidation.
"It accommodates the increase in spending on health, education, and scientific research mandated by the constitution, reforms subsidies to make them more efficient and equitable, raises taxes on high earners, and strengthens social safety nets through the development of cash transfer systems," it said.
Unemployment, which stood at 13.4 percent in 2013/14, is expected to drop to 13.2 percent and then 12.7 percent in the following two years, it said.
Looking ahead, the IMF advised the government to broaden tax revenues and continue to reform subsidies and public sector wage and hiring practices.
Egyptian Finance Minister Hany Kadry Dimian welcomed the review, calling it a balanced endorsement of government policy, which he said had made bold moods like subsidy cuts to send the "right signal at the right time."
"We front-loaded a number of very tough policy reforms to send a message of seriousness of the government and of the regime on the determination and firmness to restore this economy," he said, adding that the country was not currently looking for an IMF loan package.
"We're open to all types of collaboration with all institutions, with all sources of financing as needed. But there are no concrete plans for the time being to talk about, or to consider, an IMF financing package," he told reporters over the telephone.