IMF approved final $2bn loan payment for Egypt

WASHINGTON: The International Monetary Fund on Wednesday approved the release of the final $2 billion tranche of a loan package for Egypt, completing the three-year program.

"Egypt has successfully completed the three-year arrangement under the Extended Fund Facility and achieved its main objectives," David Lipton, the IMF's acting managing director, said in a statement.

The latest payment means the IMF has released the entire $12 billion of the loan agreed in late 2016.

The situation in Egypt "has improved markedly since 2016," Lipton said, noting the government has stabilized the economy and put public debt on a downward trajectory, which led to a recovery in growth and employment.

Since President Abdel Fattah al-Sisi took power in 2014, his government has enforced a strict austerity program designed to jump-start the economy.

The economy took a battering in the immediate aftermath of the revolution that ousted long-time autocrat Hosni Mubarak in 2011.

But direct foreign investment has grown to record levels but the country's debt and essential household costs have ballooned.

The government in May raised electricity rates by 15 percent as part of the belt-tightening measures under the IMF program.

However, Lipton said the reforms "create room for spending in health, education, and social protection."

"The outlook remains favorable," he said.

The IMF in April forecast the Egyptian economy would pick up speed this year, expanding by 5.5 percent, while inflation should slow to 14.5 percent.