IMF greenlights new US$2bn loan tranche to Egypt 1
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Rédaction Ecomnews Med
Friday 16 November 2018 Last update on Friday, November 16, 2018 At 11:07 AM

As part of the review mission, Egyptian officials and the IMF have reached a staff-level agreement for the disbursement of new US$2bn loan tranche.

IMF, Egypt reach a staff level agreement on US$2bn loan disbursement

Egypt is on the right track. The International Monetary Fund’s delegation to Egypt has announced in a statement published on October 30 that it has reached a staff-level agreement on the fourth review of Egypt’s economic reform programme which will finalise granting the country US$2bn.The staff-level agreement is still subject to approval by the IMF executive board.

The IMF’s fourth review brings total disbursements to US$10bn

The International Monetary Fund (IMF) has agreed to disburse another US$2bn loan tranche to Egypt out of a US$12bn total, as the country continues to undertake reforms that show a positive effect on economic growth and local development.

The US$2bn loan tranche which still needs the IMF executive board’s approval will bring total disbursements to US$10bn as revealed by Subir Lall, Assistant Director of IMF’s Middle East and Central Asia Department.

It should be noted that Egypt agreed the US$12bn IMF loan programme in November 2016. The latter is tied to a package of economic reform measures including, tax hikes, subsidy cuts, enactment of the value-added tax as well as the liberation of the exchange rate.

The fourth review of Egypt’s economic reform programme

Since the Egyptian revolution of 2011 that forced out former president Hosni Mubarak, the economy of Egypt has received multiple shocks caused by security issues and political instability. But the country has begun to reap the benefits of its ambitious reforms, said the IMF in a statement.

The international organisation headquartered in Washington noted that the growth rate for the 2017/2018 fiscal year that ended on June picked up to 5.3 percent compared to the previous 2016/2017 period. The IMF also noted that Egypt’s unemployment rate dropped to below 10% and inflation has fallen from 33 percent in July to 11.4 percent in May 2018.

Al-Sissi’s government is targeting growth of about 8 percent for the 2021/2022 fiscal year and will continue to implement reforms to support private sector development and create the jobs needed to achieve more sustainable and inclusive growth. “These reforms include: improving access to industrial land; promoting competition; improving transparency and accountability of state owned enterprises; and fighting corruption” (IMF statement).

 

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