In its annual review of the Egyptian economy the IMF said that it expected Egypt to continue its economic progress and gain further momentum in 2006. The IMF also appreciated Prime Minister Ahmed Nazif's economic program.
Nazif has cut customs tariffs and proposes to reduce tax rate. The Nazif cabinet also plans to
aggressively pursue privatisation of state-owned enterprises. IMF's report expects Egyptian economy
to grow at 5% in real terms in 2005-06 (Jul-Jun), above the estimated 4.8% growth in 2004-05. IMF
estimates inflation to moderate to 8% in 2005-06 from the estimated 9.6% inflation in 2004-05. While
appreciating the economic growth, IMF also cautioned the government that the growth rate is not
adequate to answer Egypt's high unemployment rate.
IMF also suggested that the Egyptian government should increase its revenues by implementing its planned economic reforms and at the same time contain expenditure and follow prudent monetary policy to keep a check on inflation. Egypt's Ministry of Planning has proposed EGP 112bn (USD 19.4bn) investment plan for 2005-06. The proposed plan projects the country's GDP to grow at 6% during the financial year 2005-06 from 5% estimated for current year, 2004-05.