AFP, Washington :
The International Monetary Fund on Friday approved a three-year, $12 billion loan for Egypt to help the country recover from its economic crisis amid soaring inflation and deficits.
The IMF executive board said it would release $2.75 billion to Egypt immediately, while further disbursements will depend on the country’s economic performance and agreed milestones in implementing the reforms.
The program “will help Egypt restore macroeconomic stability and promote inclusive growth,” the board said in a statement.
IMF Managing Director Christine Lagarde said the IMF would be supporting an Egyptian “homegrown economic program” that addresses a huge budget deficit, rising debt, slow growth and high unemployment.
“The authorities recognize that resolute implementation of the policy package under the economic program is essential to restore investor confidence, reduce inflation to single digits, rebuild international reserves, strengthen public finances, and encourage private sector-led growth,” she said in a statement.
She said that there were “significant” risks to implementing the program, but that those risks were mitigated by key actions already being taken by the government and “broad political support” for the loan program’s goals.
The loan announcement by the global crisis lender comes after Cairo took crucial preliminary reform steps in recent weeks to meet IMF requirements, including cutting fuel subsidies, announcement of a value added tax, and floating the Egyptian pound, which subsequently lost 45 percent of its value against the US dollar.
Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents. Police had to put down some small protests Friday against rising prices, and analysts warn the government will continue to face challenges.
The International Monetary Fund on Friday approved a three-year, $12 billion loan for Egypt to help the country recover from its economic crisis amid soaring inflation and deficits.
The IMF executive board said it would release $2.75 billion to Egypt immediately, while further disbursements will depend on the country’s economic performance and agreed milestones in implementing the reforms.
The program “will help Egypt restore macroeconomic stability and promote inclusive growth,” the board said in a statement.
IMF Managing Director Christine Lagarde said the IMF would be supporting an Egyptian “homegrown economic program” that addresses a huge budget deficit, rising debt, slow growth and high unemployment.
“The authorities recognize that resolute implementation of the policy package under the economic program is essential to restore investor confidence, reduce inflation to single digits, rebuild international reserves, strengthen public finances, and encourage private sector-led growth,” she said in a statement.
She said that there were “significant” risks to implementing the program, but that those risks were mitigated by key actions already being taken by the government and “broad political support” for the loan program’s goals.
The loan announcement by the global crisis lender comes after Cairo took crucial preliminary reform steps in recent weeks to meet IMF requirements, including cutting fuel subsidies, announcement of a value added tax, and floating the Egyptian pound, which subsequently lost 45 percent of its value against the US dollar.
Egypt is reeling after six years of political and economic turmoil involving the ousters of two presidents. Police had to put down some small protests Friday against rising prices, and analysts warn the government will continue to face challenges.
