Egypt has reached a staff-level agreement with the International Monetary Fund for an instalment of about $2 billion more from a three-year, $12 billion loan programme, the IMF said in a statement on Friday.
The payment, which is still subject to IMF executive board approval, will bring total disbursements under the program to about $6 billion. Egypt is pushing through an ambitious economic reform package as part of the loan deal.
An International Monetary Fund (IMF) team led by Subir Lall visited Cairo from October 25 to November 9, to hold discussions with the Egyptian authorities on the country ongoing economic programme.
The staff-level agreement on the second review reaffirms the authorities’ commitment to their reform programme supported by the IMF.
According to the statement, “Egypt’s economy continues to perform strongly, and reforms that have already been implemented are beginning to pay off in terms of macroeconomic stabilisation and the return of confidence.”
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 IMF austerity reforms to fix Egypt’s economy while limiting the fallout on poorer Egyptians as he prepares for a possible re-election bid next year.