IMF will worry about Cairo's debt burden later

Significance

The review will take into account the effects of measures taken thus far, in particular the flotation of the Egyptian pound, and will assess the government’s budget for the 2017-18 (July-June) fiscal year.

Impacts

• The government will struggle to reduce the deficit because of the scale of public debt and the record high domestic interest rate.
• Government expenditure on wages will rise at a much lower rate than inflation.
• The public will also face further rises in indirect taxation, revenue from which is projected to rise by 40%.
• The IMF is unlikely to raise any serious objections to the government’s plans.