Egypt, IMF reach agreement on $2B loan disbursement
cairo — Egypt has reached a stafflevel agreement with the International Monetary Fund for an installment of about $2 billion more from a three-year, $12 billion loan programme, the IMF said on Friday.
The payment, still subject to IMF executive board approval, will bring total disbursements under the programme to about $6 billion. Egypt is pushing through ambitious economic reforms under the loan deal.
As part of a second review, the IMF said broad reforms, which included a floatation of the pound currency, were beginning to pay off in terms of “macroeconmic stabilisation and return of confidence.”
“While the reform process has required sacrifices in the short term, seizing the current moment
While the reform process has required sacrifices in the short term, seizing the current moment of opportunity to transform egypt... will improve living standards and increase prosperity IMF statement
of opportunity to transform Egypt into a dynamic, modern, and fastgrowing economy will improve the living standards and increase prosperity,” it said in a statement.
The IMF noted growth for the 2016-17 fiscal period had picked up to 4.2 per cent compared to a forecast 3.5 per cent, the current account deficit in dollar terms had narrowed and portfolio investments and foreign direct investment had increased.
Egypt floated its currency a year ago, and the pound has roughly halved in value. As the currency dropped, inflation surged to record highs over 30 per cent, though consumer prices have dipped in the last three months.
The economic outlook is key for Egyptian President Abdel Fattah El Sisi who must balance IMFausterity reforms to fix Egypt’s economy while limiting the fallout on poorer Egyptians as he prepares for a possible re-election bid next year. —