July 24, 2019 / 8:07 PM / a month ago

IMF says Egypt can draw final $2 billion from $12 billion loan program

FILE PHOTO: International Monetary Fund (IMF) Deputy Managing Director David Lipton attends a conference entitled "Bretton Woods: 75 years later" in Paris, France, July 16, 2019. REUTERS/Philippe Wojazer

WASHINGTON (Reuters) - The International Monetary Fund said on Wednesday its board completed the fifth and final review of Egypt’s $12 billion loan program, allowing authorities in Cairo to draw another $2 billion in funds.

The disbursement will complete the amount approved under the three-year extended fund facility program launched in November 2016.

“Egypt has successfully completed the three-year arrangement under the Extended Fund Facility and achieved its main objectives,” IMF Acting Managing Director David Lipton said in a statement. “The macroeconomic situation has improved markedly since 2016, supported by the authorities’ strong ownership of their reform program and decisive upfront policy actions.”

He said Egypt had met a 2018/19 primary budget surplus target of 2% of GDP, and it would be important to maintain primary surpluses at that level to keep public debt on a downward trajectory. Elimination of most fuel subsidies will help in this regard while promoting energy efficiency, he added.

A favorable economic outlook provides an opportunity to advance further structural reforms to boost private sector growth and job creation, but Lipton said more work was needed on reforming state own enterprises, competition policy, public procurement and industrial land allocation.

“Deepening and broadening of effective reforms is critical to underpin the positive outlook for growth and unemployment,” Lipton added.

Reporting by David Lawder and Andrea Shalal; Editing by Richard Chang

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