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IMF gives draft approval to $820m Egypt payout

Loan is for acceleration of structural reforms to boost private sector

By AFP - Jun 08,2024 - Last updated at Jun 08,2024

Washington — The IMF and Egypt have reached agreement on a loan program review to unlock around $820 million, setting the stage for "an acceleration of structural reforms", the Washington-based lender said last week. 

The International Monetary Fund (IMF) said in a statement that its staff had reached the agreement on the third review of an existing Extended Fund (IMF) Facility loan agreement, shortly after concluding a two-week visit to the North African country.

The accord, which is subject to approval by the IMF's executive board, will make around $820 million available to Egypt as it continues making deep structural changes to its economy. 

These include plans to boost the role of the private sector in the economy, tackling high inflation and government debt, and shifting to a more flexible exchange rate, the IMF said. 

"While geopolitical tensions and their impact on Egypt remain challenging, the authorities have stayed the course," IMF Egypt Mission Chief Ivanna Vladkova Hollar said in a statement. 

"These efforts are beginning to deliver an improved outlook, improved FX [foreign exchange] availability, inflation starting to slow down and signs of recovery in private sector sentiment," she continued. 

Despite Egypt's progress, "downside risks" to the economy remained, Hollar said, highlighting the ongoing spillovers from the Israel-Hamas conflict in Gaza, and attacks against Red Sea shipping, which have sharply reduced its revenues from ships passing through the Suez Canal. 

"The stage is set for an acceleration of structural reforms, which will be critical to achieving the objective of sustainably raising private sector-led growth," the IMF said.

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