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IMF approves 2 billion USD loan installment for Egypt

Saturday 30 June 2018 10:39 AM

The IMF's loan
The IMF's loan

The International Monetary Fund (IMF) on Friday approved a 2 billion-U.S.-dollar loan installment for Egypt under a 12 billion dollar aid deal to support the country's economic reform.

The latest loan, the fourth installment of the package, brings the total released loan to over 8 billion dollars.

In November 2016, Egypt agreed to a three-year, 12 billion-U.S.-dollar IMF loan program tied to ambitious economic reforms such as subsidy cuts, tax hikes, enacting a value-added tax, as well as the devaluation of its local currency.

In the latest move to phase out subsidies, Egypt increased fuel prices on June 16 by up to 66.6 percent to meet the IMF loan deal. Earlier that week, it raised electricity prices by an average of 26 percent in the 2018-19 fiscal year.

Egypt's President Abdel-Fattah al-Sisi, who encouraged the reforms, said that the government spends some 18.6 billion dollars a year on subsidies to cover fuel, food and electricity.

The North African country's economic growth rate is expected to reach 5.2 percent in the 2017-2018 fiscal year due to an anticipated increase of gas production, the IMF said in an annual report released in early May. Egypt's fiscal year starts in early July and ends in late June.