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IMF says Egypt makes mixed reform progress, cites state dominance of economy - REUTERS
CAIRO, July 16 (Reuters) - Egypt's progress on structural reforms under an $8 billion International Monetary Fund loan agreement has been mixed, the fund said, citing the public sector's continued dominance of the economy as a problem.
In its long-delayed staff report for the fourth review of Egypt's programme, the IMF said there had been limited headway in reducing the role of state- and military-owned firms which enjoy preferential treatment in the form of tax exemptions, access to prime land and cheap labour.
These companies remain largely shielded from public scrutiny, with "very limited transparency about their financial condition", the fund said.
Egypt's reliance on a state-led growth model, centred on mega-projects and public investment, was curbing job creation and stifling the private sector in an increasingly volatile global environment, it said. "The resulting financial and resource distortions have left Egypt with a large informal economy and few buffers against growing global financial, geopolitical and climate shocks," the fund said.
The report was published late Tuesday, four months after the board approved the review and unlocked a $1.2 billion disbursement. Total disbursements are around $3.5 billion.
