IMF agrees disbursement of $2bn loan to Egypt

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Sunday - 10 December 2017

The International Monetary Fund said on Friday that after a review of Egypt’s economic reforms it has agreed to the disbursement of a $2bn loan –part of the $12bn extended facility negotiated last year with Cairo. The IMF executive board still has to sign off on the agreement to transfer the latest tranche but a team from the Fund which just visited the country issued a statement saying that it “affirms the authorities’ commitment to their reform program supported by the IMF”. “Egypt’s economy continues to perform strongly, and reforms that have already been implemented are beginning to pay off in terms of macroeconomic stabilization and the return of confidence,” said the IMF mission. “While the reform process has required sacrifices in the short term, seizing the current moment of opportunity to transform Egypt into a dynamic, modern, and fast-growing economy will improve the living standards and increase prosperity for all Egyptians.” As part of its obligations under the programme, Egypt devalued its currency last year and slashed energy subsidies. The value of the Egyptian pound halved against the dollar and inflation soared to 30 per cent. With the latest tranche, the IMF will have disbursed $6bn under the three year programme. The Fund said the Egyptian economy grew by 4.2 per cent in the fiscal year which ended in June 2017 surpassing projections of 3.5 per cent growth. It expects inflation to drop to around 13 per cent by the end of next year.