Transcript

Transcript of April 2023 Middle East and Central Asia Department Press Briefing

April 13, 2023

Speakers:

JIHAD AZOUR, Director of Middle East and Central Asia Department, International Monetary Fund

WAFA AMR, Senior Communications Officer, International Monetary Fund

MS. AMR: Thank you for joining our press conference on the Middle East and Central Asia Regional Economic Outlook. My name is Wafa Amr, and with us is Jihad Azour, Director of the IMF’s Department for the Middle East and Central Asia.

Mr. Azour will summarize the findings of the Asian Economic Outlook Report before we take your questions. We do have interpretation into Arabic and French for those who need it. Thank you. Please, Jihad.

MR. AZOUR: Thank you, Wafa, and good morning, everyone. Welcome to the IMF 2023 Annual Meetings. Before answering your questions, I would like to make a few remarks about the economic outlook for the Middle East and North Africa, as well as also for Caucasus and Central Asia.

Let me start with the Middle East and North Africa. Despite a series of global shocks, Middle East and North Africa regions surprised on the upside last year. We estimate that the GDP grew by 5.3 percent, reflecting strong domestic demand and the rebound in oil production. However, growth is projected to slow this year to 3.1 percent due to tight policies to restore microeconomic stability, agreed OPEC plus production cuts, and the fallout from the recent deterioration in global financial conditions. In MENA our exporters’ growth is projected to slow from 5.7 percent in 2022, to 3.1 percent this year with the main driver of growth shifting from oil to non-hydrocarbon activities in most countries. Growth is also set to slow in the region emerging markets, falling from 5.1 percent to 3.4 percent. Meanwhile, low-income countries will continue to lag with growth at 1.3 percent this year, as they struggle with high commodity prices, macroeconomic instability, and country-specific fragilities.

These projections reflect developments prior to the OPEC plus oil production cuts that were announced a few weeks ago. These cuts will lower growth for the GCC region, but will have a positive outcome on fiscal and external positions as high oil prices offset the impact of lower growth. Higher oil prices are, however, likely to increase fiscal and external strains for MENA importers. After surging last year, inflation is forecast to remain unchanged at around 15 percent this year, before declining modestly in 2024. Let me now turn to the outlook for the Caucasus and Central Asia. More than a year into the war in Ukraine, the conflict remains a major source of uncertainty for CCA countries. On the back of strong post-pandemic recovery, CCA growth in 2022 was supported by a larger than expected contraction of the Russia economy and high oil prices in oil exporting countries, as well as increased transit trade, large inflows of income, capital, and migrant from Russia oil importing countries. However, as the impact of some of this some of these spillovers fades, we expect GDP growth to slow this year to 4.2 percent.

Inflation. Headline inflation is projected to ease in 2023, reflecting lagged impact of monetary policy tightening and easing global commodity prices but, to remain at around 12 percent this year before slowing further in 2024.

I would like to say a few words about the recent financial market instability and the risks ahead. So far, spillovers to the region’s banks have been limited, reflecting no direct exposure to Silicon Valley Bank, and limited exposure to Credit Suisse. The region’s financial markets have moved in line with global trends though countries with large debt burden have seen a larger impact. That said, the risks to our baseline are high; and let me highlight three key risks.

First, further financial sector instability in advance economy could lead to contagion and more adverse credit conditions, depressing global growth, and exacerbating financial market volatility and debt sustainability concerns for many emerging markets in the MENA region.

Second, tighter for longer global financial conditions could prompt investors to reassess debt sustainability, pushing the most vulnerable economies to the brink of debt distress.

Third, an escalation of the war in Ukraine could lead to high volatility in commodity markets, fueling additional inflationary pressures across the region and amplifying the risks of social unrest.

The further question is what are the policies that countries, across the MENA and CCA region, need to prioritize; and with continued uncertainty policies tradeoffs remain complex, and striking the right balance will be critical for many countries.

First, monetary policy should focus on maintaining or regaining price stability. Bank supervisors should ensure that banks have governance and risk management commensurate with their risk profile, including capital adequacy and liquidity stress tests. Fiscal policy should preserve debt sustainability with buffers while providing targeted and temporary support to protect the most vulnerable where this is needed. Meanwhile, structure reforms should be accelerated to boaster potential growth and enhance resilience, inclusion, and build social safety nets.

We will explore the policy priorities for our region in greater depth when we launch our full regional economic outlook in Dubai and in Kazakhstan next month. In the meantime, we will be releasing the REO anayltic chapter on the region’s monetary policy response to the recent inflation surge this afternoon at 5 p.m. and you are most welcome to attend.

Before I open the floor to questions, I want to underscore the IMF deep commitment to supporting countries in the region with policy advice, technical assistance, and in many cases, financial support. Since 2020, the Fund has supported the MENA and CCA members with $29.7 billion dollars in financing commitment, including recent Fund arrangements for Armenia, Egypt, Mauritania, and Morocco, and allocated $49.3 billion Special Drawing Rights to boost the region’s reserve assets.

Last, but not least, the upcoming Annual Meetings in Marrakesh, in October, will provide a platform for wide ranging policy discussions on challenges facing the region and also the world.

Again, I would like to thank you all for participating here in the room and also virtually; and I’m very happy to take your questions.

MS. AMR: Thank you very much, Jihad. We’ll turn to your questions now. Please introduce yourselves when you ask your question and your media organization; and you can ask in Arabic as there is interpretation. A question here, please.

QUESTIONER: From Bloomberg [in Arabic].

Mr. AZOUR: [in Arabic] the decline of productivity effects the growth of the oil sector. Also the non-oil sector in oil exporting countries, especially GCC countries, would continue to accomplish good growth rates, about 4.5 percent in 2023 and 2024, as well as medium levels, about 4 percent for the following years. In terms of the production reduction, it has negative impact on growth but it will still remain at reasonable rates. On the other hand, the higher prices, that are expected, would have a positive impact on the reserves of such countries. Also, on the general financing.

QUESTIONER: My first question. How do you assess the performance of the Saudi economic and the growth in Saudi Arabia in the framework of the current economic recession and the inflation, and what are the strengths of the Saudi economy at this point, in particular, despite the global circumstances.

MS. AZOUR: Thank you for your question. The Saudi economy in 2022 had the highest growth of the G20 economy, 8.7 percent, which is the highest growth rate by a country member of the G20.

What are the reasons behind this positive growth? There are two main reasons. First, the reforms that were adopted in the last few years that proved to be very effective in diversifying the economy and in allowing the non-oil sector to grow and diversifying revenues for the Government. Of course, we also had the increase in oil prices that had a huge impact on the growth. I mean, there was a growth of the oil sector by 16 percent. We expect the Saudi economy to continue growing and we expect also the non-oil sector to continue to grow thanks to the reforms that were adopted by broadening the work market and jobs. And there are also these huge projects and investments that are increasing production in Saudi Arabia. And inflation remains under 3 percent in the Kingdom of Saudi Arabia. And this is due to the monetary policies that were adopted and the fact that the Saudi Riyal is linked to the U.S. dollars, which brought stability to prices at many levels.

And we also had some subsidies. What are the main strengths of the Saudi economy? Mainly it is the fact that the economy in Saudi Arabia at this point can diversify very quickly and invest in promising sectors on the middle and long range like, technology services and environment friendly sectors. In Saudi Arabia and other Gulf countries, on the other hand, we need to take into consideration the changes in oil prices. So, we cannot have financial policies that may encourage this volatility of the oil prices.

Saudi Arabia should keep this conservative financial policy as it has for the last few years and needs to diversify its economy and also increase productivity.

Ms. AMR: Thank you. Another question.

QUESTIONER: I have two questions. First, I would like to pick up on what you said regarding the Annual Meetings in Marrakesh. What are the opportunities for MENA countries and African countries? Is there going to be greater focus on challenges and the debt, which is building up? The second question is on Tunisia. What is the state of the partnership with Tunisia, especially as the president has rejected IMF dictates.

Ms. AMR: So, the IMF kept a 3 percent growth expectation for Morocco. Why do we keep this number despite the fact that we had very negative expectations at the agricultural level in Morocco?

MR. AZOUR: First, this year's meetings are very important. It's the first time in 20 years in an Arab country and the first time in 50 years in Africa. It's brings together civilizations at critical time. One of the themes of the Annual Meetings will be resilience. It's important as it helps countries face multiple shocks and especially for the most vulnerable.

So, support to growth, job creation, the situation of youth and women in the economy are important themes. There will be several meetings that will guide our path to Marrakesh. And we hope that these meetings will be an opportunity to discuss these important topics and come up with a positive outlook for the future.

The second aspect is stability. We are in a fragmented and uncertain world. It's, therefore, important to discuss how we can work together as an international institutions, as major countries and other countries. And how can we live up to the aspirations of the countries and people who are actually the members of the IMF. So, we will discuss how to overcome fragmentation and work together as a global community to enhance stability.

Third, we will take a look towards the future. The countries in the region face challenges in the area of the climate, for youth and others. And we will discuss all of that. And COP-28 will be taking place in the region as well. We expect Marrakesh to be a gateway to other major events.

Now, I would like to pick up on the question on Morocco. Last year, Morocco's growth was negatively affected by the drought. This year is better. In addition, policies implemented by the Government of Morocco over the past decade have allowed the Government and the country to overcome multiple shocks, strengthen economic stability and during the Covid-19 crisis, the Government reacted very forcefully and effectively. It has also reviewed its social protection model. Of course, that's a result of continued work.

Recently, the IMF approved a new program as part of its partnership with Morocco. And this attests to the hard work Morocco has done.

Now, regarding Tunisia, the IMF has been working with Tunisia for about a decade and has supported this country during difficult times. Namely, during the Covid-19 crisis, Tunisia was the first country in the region to benefit from IMF support. We very quickly implemented a new program. We did the same after the Bardo terrorist attack. Therefore, the IMF is committed.

The program that is being implemented is Tunisia's own program. The prime minister has always insisted on that. We support that program. It has important components to help Tunisia strengthen its economic stability in an uncertain words and with partners in Europe that are facing difficulties, it allows the economy to benefit from its talent. It guides growth and it provides for public sector reforms that will strengthen Government effectiveness and autonomy. It also aims at increasing the social justice through policies that increase tax equity. And that's why there is a reform of subsidies during the first phase of the program was approved six months ago, and we're working with authorities to make sure that preliminary actions to go to the IMF Board and financial assurances are put in place. And we have worked hard to guarantee international support.

What matters at this stage is for Tunisia to take strong ownership of the program. Experience has shown that a successful program is a program that has support and ownership of the country. After developing the program, authorities have to take ownership of all the policies because the program is a result of consultations and social dialogue, which is also important. So, that's the situation for the program with Tunisia.

MS. AMR: Okay, so we'll take other questions on Tunisia. We'll go online and then we'll come back to you.

QUESTIONER: Khadija from Africa News Agencies. How do you assess the Tunisian economy. What do you suggest by way of solutions to exit the current Tunisian crisis? Is it possible in the atmosphere of fear of economic reform to review such reform and to ease up the conditions regarding the financial agreement?

QUESTIONER: Negotiated, but the President is also saying that he doesn’t want any diktats imposed by the IMF, so what do you want to see in order for the program to go ahead, and have you had any direct contact with Italian officials who are actually pushing for a quick solution and a quick deal to be adopted fearing an increase of flow of migrants?

QUESTIONER: On what President Said had said, if you had a view there that there was partial agreement, agreement in principle on the amendment on the reform, what does that mean, in terms of renegotiating such required reforms and conditions? Thank you.

MR. AZOUR: Okay. I will say it in English and then I’ll say the same thing in Arabic because the questions are almost the same. In English, ownership of program is very important for its success. As I mentioned earlier, this program has been designed proudly by the Tunisian authorities. A team of more than 100 senior civil servants around the Prime Minister were working on the design of the program. This is a program that would help Tunisia stabilize its economy, address, in a world of high uncertainty, the challenges in terms of getting access to finance, but also give the opportunity for the Tunisian economy to grow and to grow fast. This is a program that has been also negotiated and consulted, and this is something that we have welcomed discussions with trade unions, with the civil society. This is something that we have encouraged the Government to do so. We are in continuous dialogue with authorities, and since the staff level agreement, we have worked hand-in-hand with the authorities on a weekly basis, and in certain cases, on a daily basis to mobilize international assistance and to mobilize support to Tunisia and to the Tunisian people who deserve to be supported. They deserve to be supported by providing additional stability to their economy, to address issues of inflation, and also to create the playing field for the private sector, and we are on that committed, as we were in the past, to Tunisia.

We have asked about some measures, and let me go specifically to the one that people are alluding to. The current subsidy system is very regressive, and in fact the poor people are paying for the more wealthy of people. For the 50 liter of gasoline, the State is paying you back $20. I don’t think that those $20 are used wisely in the case of an economy that needs to invest in its future. Therefore, and again, I repeat, this program has been designed, it’s a home-grown program designed by the Tunisians, and we think this is the program, and not only us. Other international and multi-lateral institutions have also concurred and promised to provide assistance to Tunisia on that.

I would say the Fund has -- and I said it earlier -- has been a constant supporter to Tunisia over the last decade in difficult moments during the COVID crisis, during the events of the [inaudible], and before we would keep supporting Tunisia with our -- not only our programs through technical assistance -- and a constant dialogue with the Tunisian authorities for the benefit of the Tunisian people.

MS. AMR: Thank you Jihad. We do have a question virtually, online from [Zaglami], so please ask your question, and then we’ll come back to you. We can’t hear you. Can you turn your microphone on? You’re muted. So we can come back to you. We can come back to you. [Fayaz], did you have a question? You’re muted, as well.

QUESTIONER: I’m unmuted. Can you hear me now?

MS. AMR: Yes. Now we can hear you.

QUESTIONER: -- what’s the status of the online program [inaudible]. Thank you.

SPEAKER: Sorry. It wasn’t very clear.

Mr.AZOUR: I’m sorry. I was not maybe hearing very well your question, but let me say –

QUESTIONER: Can you update us on the status regarding resumption of Pakistan’s IMF program?

MR. AZOUR: Well, first of all, as you know, Pakistan is at a critical juncture today, and decisive actions are required to stabilize economy. Recently, the policies that were adopted go in the right direction, and it is important to, in the current juncture, to, on the one hand, to maintain monetary stability by addressing the issue of high inflation that has exceeded 34 percent, and also maintaining the flexible exchange rate in order to protect the Pakistani economy from external shocks.

Discussions between the authorities and the IMF are ongoing, on the one hand to secure that we needed measure that Pakistan needs and are part of the review are met, as well as also with working together in order to have Pakistan ensure the financing needs that will be very important for Pakistan and to complete the upcoming issue.

MS. AMR: Thank you. We have a question here, and go ahead, please. Yes, the mic is in front of you.

QUESTIONER: Thank you. One thing is like -- that has been agreed by the finance ministry yesterday, which was quoting you that you said that [SLA] for is about to happen very soon, so what do you say about it? And the other thing, you said the financing needs that’s been missing, so what are the gaps that have remained, and then if we go through this review into that program, perhaps what would happen next fiscal year starting July? So the financing -- I mean, the gross financing needs are much higher next year, so -- and this problem of the financing would increase, so that’s like kicking the can down the road, so do we need to get into the debt restructuring argument at that time, or do we need to have a new program? And how would we proceed the next year? So first question is about the statement, the Finance Ministry and this program, and then what would happen the next year? Thank you.

MR. AZOUR: Thank you for your question. Well, first of all, the Fund has been very supportive to Pakistan over the years with several programs. The latest one has -- also wants to be several modifications in order to cater for the shocks that Pakistan went through, like other countries during COVID and after that. It’s very important for the Pakistani economy to address the imbalances and to maintain macroeconomic stability, and this is the stopping point: addressing inflation that is in double digit for the last three years, it’s a priority with or without the review. Reducing the constraints to trade and to export by having the right exchange rate policies is also important for the Pakistani economy and the Pakistani people, with or without an IMF program. Addressing the consequences of the flood by mobilizing international assistance and channeling funds to those who are socially the most affected is priority for Pakistan, with or without program. Therefore, the priority for us is how to help Pakistan and the Pakistani economy to weather a period of tension economically, with the uncertainties and also a political agenda that is very active, and this is our priority number one, and this is in the context of program that we have already agreed with the authorities on, and we have ensured that it’s based on certain number of actions, based on certain number of priorities. We have worked extensively with the authorities to make sure that those priorities are met. That will allow macroeconomic stability, will also provide the economy the capacity to export, especially that Pakistan is a country with huge type of talents and the capacity to grow faster.

Financing are required, and the financing needs are about what is currently in the program, and this is where we are also hand-in-hand with the authorities and the bilateral supporters of Pakistan, working to ensure that the financing needs for the program and beyond are assured. When it comes to the future, I think this is a decision that the sovereign ‑‑ it’s a sovereign decision. The authorities of Pakistan will decide what are the reforms, what type of programs they want, and what type of relationship they decide to have with the Fund, and the Fund stands ready, as it did in the past for several decades, to provide assistance to Pakistan.

MS. AMR: Thank you, Jihad. We’ll take a question here, but then, and then another question in the front, and then maybe you can answer the question on Tunisia in Arabic at some point.

QUESTIONER: Thank you very much. My name is [Nazira Azim Karimi]. I am independent Afghan journalist. Originally, I am from Afghanistan. I know for sure that you guys know about Afghanistan, especially woman’s situation, and the humanitarian assistance. A lot of money go to Afghanistan. But Taliban has a lot of influences on that; money doesn’t go to Afghan, poverty is increasing, and Afghan people sacrifice. Just, I would like to ask, I was just -– your future plan for Afghanistan, real Afghan people, especially suffered women, because Taliban take many directly and put under. Thanks so much.

MR. AZOUR: Well, of course, the Afghan economy went into a severe downturn following the change that happened almost two years ago and the takeover by Taliban. The decision to ban women and girls from attending universities and working, it’s deeply concerning. As you know, the Fund has been a strong supporter to Afghanistan over the last two decades, with their programs and support and reforms. In order to provide access to opportunities, especially for women and youth, build a strong economic and financial infrastructure to allow the Afghan people to improve their economic and social conditions. And therefore, we are concerned, and we look forward, when conditions are met for the Fund to reengage and be able to provide support to the people of Afghanistan.

MS. AMR: Thank you very much. We’ll take the question in the front.

QUESTIONER: [Speaking in Arabic]. In October 2020, the Managing Director said we are very willing and ready to help Lebanon. It’s been three years, also one year when it comes to the staff. Is there an increasing conviction that there is really no true desire in terms of reaching an agreement with the Fund? Unlike all the official statements, secondly, there are reports, media and journalistic reports, that says that you are an unofficial nominate for the presidency, and outside of the presidency, is it possible for Lebanon to exceed the crisis without a program with the Fund?

MS. AMR: we do have a few other questions from journalists in Lebanon. What’s the influence of the sanctions on the situation in Lebanon, the financial situation? The same question that had been also asked already. Thank you.

MR. AZOUR : Of course, you already know that I’m not going to answer the personal question because it’s not appropriate, but I’ll answer the first question.

When it comes to the commitment by the Fund, there is no doubt that the Fund is committed, has always been committed and has always communicated with the Lebanese authorities in order to try to assist Lebanon in overcoming the crisis. The Fund is aware of the difficulty of the socio-economic situation in Lebanon and the lack of confidence. Therefore, the Fund has always confirmed the importance of helping Lebanon to exit this current crisis, and on this basis, there were consultations and there has been an agreement in principle in April 2020 to help Lebanon exit one of the most difficult economic social crises.

Reforms are very important, as has been reiterated by the team from the IMF that visited Lebanon recently, and said that there is a need for integrated work in order to deal with the repercussions of the financial crisis and restore the confidence and to build an economy that would lead to recovery in terms of all the social categories and would retrigger growth. This requires dealing with accumulating problems, especially financial problems, as asked by [Shahir]. It is essential to have a comprehensive dealing with such crises to help Lebanon overcome the crisis, not only through the signing of an agreement in principle, but also the technical support which take place currently in harmony with the Lebanese authorities to put the frameworks for the future reforms when it comes to that manager, when it comes to financial transfers, and the general economy.

MS. AMR: Now online to Ahmad. Ahmad, are you ready for your question? Okay.

So, we do have online questions on Jordan. We have a question on Jordan from [Al-Mamlaka] TV. In Arabic, [speaking Arabic]. How can Jordan increase the economic growth in the future years? What are the expectations for the Jordanian economy in the years to come? How can Jordan reduce the general debt and reduce the losses in sections like water? Also – a question from Ro’Ya TV-– there’s a continuous praise of the Jordanian economic condition, but it’s not reflected on the ground, what is needed in this situation all together with the higher interest rates and the higher burden of debt. Is it possible to renew the agreement with the Fund?

MR. AZOUR: [Speaking Arabic]. The questions are multiple, in fact, when it comes to Jordan. I will note that Jordan has been able to confront a number of major shocks that have had an influence on the Jordanian economic stability, like the pandemic, like inflation, as well as the volatility that we see in the international financial markets. And Jordan has been able to maintain economic stability, notwithstanding a high –- a really high debt. Such measures are good in order to maintain stability. Stability is the main gateway to prosperity. It is essential for prosperity. Of course, the growth rates are relatively low in Jordan, and this has to do with the high unemployment rate. Especially after the corona pandemic crisis, it’s important to address this issue.

How do you address it? This happens through deepening the reforms that would improve the business environment and the investment possibilities that would make Jordanians benefit from the promising investments in so many countries near Jordan. Increasing the investment, improving the business environment, and reducing the cost of doing business, all these things would attract the private sector.

When it comes to energy, reforms have started. It’s understood that it would be expedited, it would be continued at the level of the energy sector, as well as other sectors. There is a group of investment projects with financial -– international financial institutions that are moving in this direction. We are counting on the ability of the Jordanian economy to invest in the new energies and in the alternative resources of energies in such a way that would develop such modern technologies. It’s a young economy, there are so many opportunities of employment and economy in the servicing sector. And it would be useful to expand such opportunities in order to give Jordan the opportunity to expedite growth.

QUESTIONER: Good evening to you all, Ahmad. I’m a journalist. I mentioned the name of the newspaper. My question, IMF agreed on a loan for Egypt last December. My question, the review last month – was supposed to take place last month, it has not taken place, when will it take place in terms of the second slice, and also some more details about the negotiations with the Egyptian government, you know, that there is a delegation from the Egyptian government and the central bank who are attending these meetings. What kind of negotiations and what kind of progress has taken place when it comes to this program? Thank you.

MS. AMR: Is there any other questions about Egypt?

QUESTIONER: I have two quick questions. I want to know the key forecasts for Egypt in terms of the macroeconomic level. The second one is, the IMF estimated the financing gap Egypt to experience over the coming 4 years at $17 billion. To what extent Egypt is managed to fulfil these commitments under the FF program approved for Egypt in December? Thank you.

QUESTIONER: Thank you. Julian Pique from Jeune Afrique. Also, on Egypt and the facility, there seems to be some trouble from Egypt to fulfill some of the key conditions of the loan. Flexible exchange rates, the sale of state assets to make way for the private sector, I was wondering if that could cause disbursements to be stalled at all. Thank you.

MR. AZOUR: Okay. Let me start with the last question. As you know, the program has been designed in order to help Egypt strengthen its macroeconomic stability and put Egypt back on a track of high growth that would create jobs and job opportunities.

What are the priorities? One, is to shield the Egyptian economy from external shocks. And this is where the exchange rate policy becomes very important. And the flexibility of the exchange rate is the best way for Egypt to protect its economy from external shocks. The one that we saw last year and the year before.

The second -inflation keeps hurting the economic stability and the livelihood of people, and that has exceeded 30 percent. And this is where it is important to maintain monetary policy that addresses and arrests inflation. And we encourage the authorities to use the monetary policy instruments specially interest rate in order to address the issue of inflation that would have a negative impact on the macroeconomic stability, but also high social cost.

Three, Egyptian economy has huge potential, and private sector is very dynamic, and there is a need to provide more space for the private sector. Redesign the role of the state to focus on priority sectors and allow through leveling the playing field, the capacity for the Egyptian private sector to create growth and create more foreign currencies.

Egypt has done important reforms over the last few years, and the Fund has been a great supporter to Egypt, including also during shock, where we provided in 2020 after the Covid shock $8 billion of support in the form of two programs. We are still supportive to Egypt reform agenda, and we are, and this is to answer the second question, the questions we are in regular dialogue with the authorities in order to prepare for the first review. And the first review preparations have started and when we and the authorities already, we will announce the date of the first review.

MS. AMR: Thank you very much. We have one last question here, please.

QUESTIONER: Yes. I had two questions about improving the reforms in Egypt in order to avoid their negative impact on the population. Is it possible to reconsider them? And then what are the solutions that you suggest for Tunisia to get out of the crisis?

MR. AZOUR: Let me remind you once again that this program took into consideration the experiences of the past. During the last 10 years, we had deep discussions over 12 months, and we prepared a program that takes into consideration the current difficulties. And also what we want to see in the future.

So, we want more investments, for instance, we want the private sector to play a bigger role. We also want the public institutions to play a better role. We want also to finance the private sector.

There is also the financial impact of the public sector on the population which comes through higher taxes. We need also to have a more targeted social protection. So, a series of problems and a series of mechanisms of support. And there are many measures that are being taken to the advantage of the rich who benefit from the public funds and the poorer population do not benefit.

So, there is a series of measures that the Government is studying at this point in Tunisia. And a series of tool to have a better targeted subsidies and financial support to the poorest. There are also reforms that are needed to make the tax system more fair. But every reform have repercussions and we need to limit the negative repercussions and improve the positive repercussions. This is exactly the model that we are working on with the Tunisian authorities. And the Tunisian authorities did not ask us to reconsider the program so far.

MS. AMR: Jihad, could we answer question about Egypt's outlook?

MR. AZOUR: Well, first of all, Egypt enjoyed a very good level of growth last year, 6.6 percent. This is among the highest growth rates that we saw in the region. Of course, the various challenges starting from the war in Ukraine, impact of this war on some of the key commodities that Egypt is exporting, as well as also on the tourism activities and the hike in inflation led to a decline in growth this year. Over the medium term, and let me look at the medium term, we expect that Egypt will return to levels of growth that exceeds 5 percent if reforms are implemented going forward in 2024 and onward.

On your question, the financing gap for Egypt is planned to be fulfilled by a certain number of sources. One is by increasing the role of the private sector through redesigning the role of the state will allow through transferring assets to the private sector to provide additional resources that on one hand will provide FDI. And on the other hand will reduce the level of debt. And those are not debt financing. There is the financing of the program, as well as also the financing support of bilaterals and other multilaterals.

Three, Egypt is a country that has access to market and also with all these measures implemented and growth recovering and confidence returning, the markets will sanction positively that and by providing additional financial support.

MS. AMR: Thank you very much. Jihad, this ends our press conference for the Middle East and Central Asia Regional Economic Outlook. We have received many other questions on other countries online. We will get back to you virtually. Thank you very much for joining us in-person and virtually.

And just a reminder, please do tune to the panel discussion at 5:00 o'clock today, Washington time on monetary policy challenges in the Middle East and North Africa.

Thank you very much.