June 29, 2018 / 10:11 PM / in 3 months

CORRECTED-UPDATE 1-IMF approves $2.02 bln payment to Egypt as part of $12 bln loan

(Corrects payment number in paragraph 1 to the fourth, not the third payment)

CAIRO, June 29 (Reuters) - The International Monetary Fund said on Friday it approved a fourth payment, worth $2.02 billion, of a $12 billion loan as part of an economic reform programme being carried out by Cairo.

The latest payment brings the total received by Egypt from the IMF to around $8 billion, it said.

As part of the loan agreement, Egypt has enacted tough austerity measures including a flotation of its pound currency in late 2016 which halved its value, and sharp fuel and electricity cuts in recent weeks.

The IMF has praised Egypt’s economic measures, although ordinary Egyptians say they continue to suffer with their spending power slashed by the devaluation and household energy prices rising.

The government of President Abdel Fattah al-Sisi this month declared it was slashing fuel subsidies, pushing up prices of petrol and public transport by as much as 50 percent, just days after it said prices for electricity would rise by an average of 26 percent and piped drinking water by nearly half.

Many economists have praised the fiscal cuts which they say will help put Egypt’s battered economy back on track after years of unrest. Others say that enacted so many cuts at the same time could risk a slow pay-off, sparking unexpectedly high inflation, crimping consumption and putting off potential investors.

The country’s economy, battered by the unrest that followed a 2011 popular uprising, has begun to improve since Sisi came to power in 2014. Authorities and many economists credit the reforms with helping to attract long-term foreign investment and accelerate growth in gross domestic product. (Reporting by John Davison and Ahmed Tolba Editing by Chris Reese and David Gregorio)

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