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Egypt—Searching for Binding Constraints on Growth

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  • Mr. Klaus-Stefan Enders
Abstract
Since 2004 Egypt's growth has been accelerating in step with the launching of a series of ambitious reforms, reversing a trend during the preceding half-decade when Egypt's growth rate fell below that of most regional peers and well below that of the average developing country. This paper seeks to identify factors that held back Egypt's growth in the recent past, and explores whether recent reforms have removed the most binding constraints to allow at least a temporary growth spurt. Overall, the Egyptian reforms launched in 2004 appear to have focused well on the most critical constraints-reducing red tape and tax rates, and improving access to foreign exchange-thereby getting a strong growth response out of a limited set of reforms. However, inefficient bureaucracy remains an important obstacle to higher growth and reforms in this area should continue to have high payoffs. Ongoing reforms are also addressing constraints that are likely to become binding soon (or have become so already), such as inefficient financial intermediation and high public debt. Improvements in education may rapidly become a critical factor for sustaining higher growth.

Suggested Citation

  • Mr. Klaus-Stefan Enders, 2007. "Egypt—Searching for Binding Constraints on Growth," IMF Working Papers 2007/057, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/057
    as

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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=20523
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    References listed on IDEAS

    as
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    Cited by:

    1. Amr Hosny & Magda Kandil & Hamid Mohtadi, 2013. "The Egyptian Economy Post-Revolution: Sectoral Diagnosis of Potential Strengths and Binding Constraints," Working Papers 767, Economic Research Forum, revised Sep 2013.
    2. Idrees Khawaja & Sajawal Khan, 2016. "Growth Diagnostics: Pakistan," PIDE-Working Papers 2016:143, Pakistan Institute of Development Economics.

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    Keywords

    WP; Egypt; export; WEF survey; product;
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