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Two months af­ter Egypt re­ceived the first $2.75-bil­lion tranche of a three­year, $12-bil­lion in­ter­na­tional fi­nanc­ing pack­age, the de­tails of a loan agree­ment with the In­ter­na­tional Mone­tary Fund were re­vealed to the pub­lic on Jan. 18. On the fis­cal side, gov­ern­ment debt is ex­pected to de­cline to around 88 per­cent of GDP in 2018/19, com­pared to 98 per­cent in 2015/16. Mean­while, the cur­rent account deficit is ex­pected to nar­row to 3 per­cent of GDP by 2018/19, and the over­all deficit to 4.7 per­cent of GDP, ac­cord­ing to a re­view com­piled by Bloomberg. These fig­ures will be achieved via in­creased rev­enue (in ad­di­tion to the new value-added tax, the doc­u­ments call for a capital-gains tax to be re­in­stated as of May), as well as cost sav­ings from cut­ting fuel sub­si­dies, keep­ing wage bill in­creases be­low in­fla­tion lev­els and de­vel­op­ing a pen­sion re­form plan. The IMF has not rec­om­mended cuts to food sub­si­dies, and the pro­gram de­vel­oped with the Egyp­tian gov­ern­ment in­cludes

so­cial pro­tec­tion mea­sures such as the ex­pan­sion of the Taka­ful and Karama pro­grams to reach 1.7 mil­lion house­holds and 7.3 mil­lion ben­e­fi­cia­ries. In a brief­ing fol­low­ing the doc­u­ment re­lease, IMF Mis­sion Chief for Egypt Chris Jarvis said he ex­pected to see “sig­nif­i­cant falls in in­fla­tion” by the sec­ond half of 2017. The next tranche of the loan is ex­pected in the spring, fol­low­ing an as­sess­ment visit by the IMF. “All be­ing well,” he said he ex­pected the funds to be re­leased in late April.

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