IMF to conduct final review of Egypt’s loan in June, says minister

The International Monetary Fund (IMF) will conduct its final review of Egypt’s $12 billion loan programme in June, the country’s finance minister, Mohamed Maait, announced yesterday.

In November 2016, the IMF offered Egypt a three-year loan programme, worth $12 billion, aimed at reviving the country’s struggling economy, bringing down public debt and controlling inflation while seeking to protect the poor. Under the loan, Egypt devalued its currency and has been gradually cutting fuel subsidies in moves that have deepened poverty.

Maait’s remarks came a day after the IMF’s agreement to disburse the fifth out of six $2 billion tranches after the financial organisation completed the programme’s fourth review on Monday.

In a statement, Maait said that the IMF’s executive board would carry out the “fifth and final review” in June 2019, adding that it would happen ahead receiving the loan’s final $2 billion tranche.

The latest instalment brings the total amount paid to Egypt to $10 billion since the loan deal agreement date.

READ: Egypt to cut fuel subsidies by 15% says minister

In June, Egypt’s external debt reached $92.6 billion, marking a 17.2 per cent increase, according to the Central Bank’s official data.

The minister recently said that some foreign investors had bought local debts, in the form of bonds and treasury bills worth $900 million. He pointed out that Egypt’s total budget deficit fell to 3.6 per cent of the country’s total Growth Domestic Product (GDP) during the first half of the current financial year 2018-19, down from 4.2 per cent during the same period the earlier year.

Egypt’s financial year begins in early July and lasts until the end of June of the following year.

Maait noted that the government was aiming to grow the country’s GDP by 5.6 per cent during the current financial year, stressing that it was “serious” about executing the national reform programme supported by the IMF loan.

Egypt has been negotiating billions of dollars in aid from various lenders to help revive an economy battered by political upheaval since the 2011 revolution and to ease a dollar shortage that has crippled import activity and hampered recovery.