IMF and Egypt

As recently as April 2010, the International Monetary Fund gave Egypt a clean bill of health.

In March 2010, the IMF concluded an Article IV consultation with Egypt.* According to the Executive Board, all was well:

Executive Directors agreed with the thrust of staff’s assessment. They commended the authorities’ sound macroeconomic management and the reforms implemented since 2004, which had strengthened the resilience of the Egyptian economy in the face of the global financial crisis.

Directors praised the authorities’ policy responses to the crisis. The targeted fiscal stimulus and successive cuts in interest rates helped cushion the impact of the global slowdown. Directors observed that economic performance held up well, with growth falling less than in many other emerging markets during 2008/09, and picking up further in recent quarters. Financial market conditions have improved and some capital inflows have resumed since the initial downturn.

There did express their concern about elevated inflation, and made one additional suggestion:

Directors agreed that continued broad-based reforms are needed to foster inclusive, employment-generating growth.

Apparently, Mubarak never read that part of the report.

*Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities.