The funds will be available upon the International Monetary Fund (IMF) executive board approval of a fourth review of the three-year programme.
The IMF staff team and the Egyptian authorities have reached a staff-level agreement on the fourth review of Egypt’s economic reform programme, which is supported by the IMF’s $12 billion extended fund facility arrangement.
In a statement, the IMF said that the Egyptian economy has continued to perform well, despite less favourable global conditions, supported by the authorities’ strong implementation of the reform programme.
Egypt’s gross general government debt declined from 103 per cent of GDP in 2016-17 to about 93 per cent of GDP in 2017-18, supported by fiscal consolidation and higher growth.
The IMF team noted that GDP growth accelerated from 4.2 per cent in 2016-17 to 5.3 per cent in 2017/18 while unemployment declined to below 10 per cent.
The Central Bank of Egypt’s (CBE) monetary policy brought down annual inflation from 33 per cent in July 2017 to 11.4 per cent in May 2018, however, the central bank aims to reduce inflation to single digits.
The Government remains committed to continuing energy subsidy reforms and raising revenues which will help create fiscal savings to invest in a well-targeted social safety net, human development including health and education, and infrastructure.
Egypt kicked off its three-year $12 billion loan programme in late 2016, agreeing to tough reforms resulting in deep cuts to energy subsidies, new taxes, and a floated currency in a bid to draw back investors who fled after its 2011 uprising.