By Iman Hamed
After the year 2017 passed when many reforms and projects on the one hand, loans and grants and rising prices on the other hand, and in light of the decline of dollar prices in the Egyptian market slightly, which some see as a sign of hope, can the Egyptian economy survive its ramifications in 2018, and what is it’s most highlights one year after the liberalization of the exchange rate?
good decision
“The decision to liberalize the exchange rate is good and it was necessary to take it a while ago, despite the fact that there are mistakes in the implementation,” said Dr. Kamal al-Desouki, deputy head of the building materials room at the Egyptian Federation of Industries.
Dessouki pointed out that the decision to liberalize the exchange rate contributed significantly to the elimination of the black market of the currency, and the dollar, and helped to provide the currency in banks at official price controlled by the state, which facilitated the circulation.
He added that the positive effects of the resolution will emerge within three years, expecting to increase the volume of incomes and decline of inflation and increase national income.
Dessouki pointed out that the decision was mistaken in its implementation at the beginning: the failure to take into account the volume of external debts to the public and private sectors, and the lack of preparation for the decision, which negatively affected existing economic entities.
The Central Bank of Egypt announced the liberalization of the exchange rate on November 3, 2016, leaving the banks free to set the exchange rate, followed by the decision to swing the dollar until the bank stabilized relatively at (17.60) pounds.
Ahmed al-Zini, head of the building materials division of the General Federation of Egyptian Chambers of Commerce, said that the decision to liberalize the exchange rate has increased the burden on traders, pointing out that the volume of costs doubled the impact on the final price of the imported product.
The total remittances of Egyptians working abroad during the month of August 2017 increased by 40.0% to record about 1.7 billion dollars (compared to 1.2 billion dollars in August 2016).
Central Bank Governor Tariq Amer said the banks had managed to save about $ 56 billion since the 
decision to liberalize the exchange rate so far.
According to a recent World Bank report, Egypt Economic Outlook, October 2017, macroeconomic conditions are moving towards stability following liberalization of the exchange rate, but inflation has jumped to record highly standard levels, with negative effects on social conditions and efforts of Poverty reduction.
The Egyptian economy grew 4.1% in fiscal year 2016/2017, slightly below the real growth rate of 4.3% 
achieved in the previous year, and after six months of decline in growth.
The balance of payments recorded a surplus of $ 13.7 billion following the liberalization of the exchange rate against a deficit of $ 2.8 billion in the previous year. The report warned of an increase in external debt after the devaluation of the currency. The total government debt to GDP reached 102.8% In the case of of a failure in the policy of implementation and the absence of real reforms in sectors.
Black market
“The decision has positively affected the increase in the monetary reserves of the Central Bank of Egypt, which contributed to the providing dollar in banks and to allow investors to open documentary credits,” said Abu Ala Abulanga, former secretary general of the Egyptian Federation of Investors Associations.
Abul-Naga added that the decision eliminated the black market of the currency and prevent the smuggling of funds. He called on the state to try to avoid the negative effects of the decision, which was reflected in the rise in prices of goods and services, which affected the most needy classes.
“The reform program in Egypt has made a good start,” said David Lipton, Acting Chairman of the Executive Board of the International Monetary Fund, following the first review of Egypt’s economic reform program last July. “The transition to the flexible exchange rate has gone smoothly, and the Parallel market phenomenon is nearly finished, as well as the problem of non-availability of foreign currency, and the reserves of the central bank has increased significantly.
The deficit declined
The trade deficit in the period from January to September 2017 declined to 23 billion and 390 million dollars against 34 billion and 860 million dollars, an improvement of 33 percent over the same period last year, according to latest data released by the Egyptian Ministry of Commerce and Industry.
The volume of Egyptian non-oil exports during the period from January to September 2017 amounted to about 16 billion and 490 million dollars compared to 14 billion and 890 million dollars during the same period of last year 2016, with an an increase of 11%.
Egyptian imports, according to data from the Ministry of Commerce and Industry, fell to 39 billion and 880 million dollars against 49 billion and 740 million dollars during the same period last year, a decline of about 20%.
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