IMF praises Egypt for 'bold' economic reforms

The International Monetary Fund on Tuesday expressed satisfaction over the Egyptian government's "bold" economic reforms, as it prepares to release the third tranche of a $12bn loan to the country.

In order to obtain the IMF's approval for the loan in November, Cairo has implemented a set of drastic reforms, adopting a value-added tax, cutting energy subsidies and floating the pound.

Subir Lall, the head of the IMF mission for the country, commended Egypt for the measures, which the fund is evaluating along with their effects as part of the three-year programme.

"The measures that have been taken by the authorities were bold, and we agree that they were necessary to reverse the build-up of imbalances that were hindering higher growth and job creation," Lall told reporters in an online briefing.

On Tuesday, the IMF released a report reviewing the programme, saying "Egypt's reform programme is off to a good start".

The rate of inflation in Egypt spiked after authorities implemented the set of drastic measures.

Lall said inflation, which stood at 33.2% on-year in August, was expected to drop to single digits by 2019.

In July, the IMF approved the second tranche of the loan, worth $1.25bn, which followed the disbursement of a $2.75bn tranche in November 2016.

"In terms of the third disbursement: that would follow after the second review of the programme, which is expected to be completed by the IMF executive board by the end of December," Lall said.

Since the 2011 revolt toppled former president Hosni Mubarak, the economy of Arab world's most populous country has received multiple shocks caused by political instability and security issues.

Source: AFP