WB Upbeat About Egypt Growth

The World Bank has welcomed economic and social reforms in Egypt, which it said would help to create jobs and revitalize the country’s economy.

Egypt this month liberalized its exchange rate and devalued its currency by almost 50% in a bid to secure a $12 billion International Monetary Fund loan, PFI reported.

It has also invested in the economy of Upper Egypt, supported by a World Bank loan of $500 million intended to be used to improve private sector development and strengthen local government capacity for infrastructure and service delivery .

The country has also adjusted energy prices to reflect market conditions, and strengthened the social safety net.

“This is an ambitious program of reforms with a strong focus on job creation and on social measures to support the incomes of the poor and the vulnerable,” said Asad Alam, World Bank country director for Egypt.

“In particular, we are pleased to support the government’s social protection efforts especially in the expansion of the Takaful program which already reaches about 4.5 million people in extreme poverty, new investments for job creation in Upper Egypt, as well as through labor intensive works for the youth and for women.”

The World Bank’s economic outlook assessment for Egypt last month noted that its nascent recovery had slowed due to the foreign exchange problems, a drop in tourism, and an unfavorable external environment.

The pain of Egypt’s currency devaluation may be felt well before the benefits, creating a period of at least several months in which there is little positive news to offset rising inflation and falling living standards, businessmen and economists say.