IMF approves Egypt to draw final $2 bln from $12 bln loan

The International Monetary Fund (IMF) on Wednesday said its board completed the fifth and final review of Egypt’s $12 billion loan programme, approving authorities in Cairo to draw another $2 billion in funds.

The disbursement will complete the amount approved under the three-year extended fund facility programme initiated in November 2016.

“Egypt has successfully completed the three-year arrangement under the Extended Fund Facility and achieved its main objectives,” IMF Acting Managing Director David Lipton said in a statement.

“The macroeconomic situation has improved markedly since 2016, supported by the authorities’ strong ownership of their reform programme and decisive upfront policy actions.”

Lipton said Egypt had met a 2018/19 primary budget surplus target of 2 percent of GDP, and it would be important to maintain primary surpluses at that level to keep public debt on a downward trajectory. Elimination of most fuel subsidies will help in this regard while promoting energy efficiency, he added.

A favourable economic outlook provides an opportunity to advance further structural reforms to boost private sector growth and job creation, but the IMF official said more work was needed on reforming state own enterprises, competition policy, public procurement and industrial land allocation.

“Deepening and broadening of effective reforms is critical to underpin the positive outlook for growth and unemployment,” Lipton added.

Source: Reuters