The International Monetary Fund reached an agreement with Egypt in its final review of the country’s economic reform program, unlocking $2 billion in aid. The staff-level accord is subject to approval by the IMF’s Executive Board, according to a statement by the international lender.
The IMF said Egypt was on track to achieve its three-year fiscal consolidation objective of 5.5 percent of gross domestic product in the primary balance. The country is making progress implementing measures to increase productivity, remove barriers to investment and trade, improve governance and reduce the role of the state in the economy, it said.
“Prudent monetary and fiscal policies and a flexible exchange rate have underpinned macroeconomic stabilization and strengthened Egypt’s resilience to external shocks,” the IMF said. “We welcome the authorities focus on structural reforms as it needs to be deepened to facilitate inclusive growth and job creation for all.”
The Arab world’s most populous nation secured the loan in 2016 after halving the value of the pound relative to the dollar and cutting subsidies as part of a sweeping program to overhaul the economy. The IMF loan helped restore investor confidence during the upheaval, which sent inflation and discontent soaring among the country’s millions of poor.
The IMF said the central bank’s aim of reducing inflation to single digits in the medium term “would help to further strengthen macroeconomic stability, reduce interest rates, and attract investment.”
A version of this article appeared in the print edition of The Daily Star on May 18, 2019, on page 4.