Financial institutions and foreign investors have shown their contentment with Egypt’s removal of energy subsidies, VAT, liberalized exchange rate, investment and banking reform, yet push for further liberalization.
IMF is aiming for a balanced budget in Egypt, which is blocked by the high expenditure on wages and subsidies and interest on past loan payments.
A value-added tax has been approved by the cabinet, yet is also still looked at hesitantly by the parliament and banks who refuse to implement it.
Along with implementing the VAT tax, the IMP also demands for a liberalized exchange rate.
Yet, political instability still continues to act as the major barrier for foreign investment, as director of the Monetary and Capital Markets Department stated.