Is Egypt cutting subsidies?.. International Monetary Fund sends new instructions to Egypt
The International Monetary Fund said that Egypt is able to pay off its debts financed by the fund over the last period.
The International Monetary Fund indicated in a report released today that Egypt’s macroeconomic stability, progress and steps taken in structural reform efforts are maintained within the framework of the EFF and improvements in the general and external budget.
The Fund expected the steps taken by Egypt towards reforms to contribute to its adequate solvency, as well as recent moves towards an under-exchange rate, as flexibility after potential shocks remains a major risk to policy implementation, especially if they result in future stock losses. Years of big ransoms.
The report calls for the need to reduce gasoline subsidies and provide subsidies for kerosene and diesel instead of gasoline, emphasizing that subsidies are limited to food and fuel consumed by the poor, in addition to providing cash assistance to the most needy groups.
The International Monetary Fund said better targeting of social assistance in Egypt is critical to protecting vulnerable populations from rising energy and food prices while maintaining financial sustainability.
In the report, IMF experts stressed that more targeted assistance is critical to protecting the poorest while avoiding an increase in oil consumption while continuing comprehensive support, and the Fund recommended that subsidies be targeted, transparent, and time-bound.
The Fund said that comprehensive support should be limited to basic food and fuels consumed by the poorest groups, such as kerosene and diesel instead of gasoline, to the extent that targeting mechanisms are limited, and necessary social assistance can be provided through existing infrastructure such as as such for social school meal programs.
The IMF called for the phasing out of inefficient and non-targeted fuel subsidies through more stringent application of automatic pricing mechanisms for petroleum products to align domestic energy prices with international fuel prices while launching targeted cash subsidies; The latter requires investments to improve the social situation in order to identify the most vulnerable groups. The Fund indicated that other accompanying measures should be considered (eg public transport subsidies) and the communication strategy should explain the benefits of energy subsidy reform.
Source: Cairo 24