The International Monetary Fund’s (IMF) executive board is expected to discuss approving the third review of the Egyptian economy under the $12bn Extended Fund Facility (EFF) agreement on 27 June. An approval would enable Egypt to receive $2bn, bringing total disbursements under the programme to $8bn.
The executive board approval comes after a staff agreement third review on Egypt’s economic reform programme, during an IMF mission visit to Egypt from 2 to 17 May, while next week will witness releasing the third review staff report.
The IMF mentioned in a previous statement in May that Egypt’s GDP growth continued to accelerate, reaching 5.2%, during the first half of fiscal year (FY) 2017/18, compared to 4.2% in FY 2016/17. The increase in growth reflected the recovery in tourism and strong growth in remittances, as well as improved investor confidence, the statement indicated.
As a part of the economic reform programme, the Egyptian authorities announced hikes to subsidised government-set fuel prices on Saturday, lifting gasoline and diesel prices by between 17-66% and raising the price of a litre of gasoline 92 to EGP 6.75, up from EGP 5. The price of gasoline 80 and diesel fuel both increased from EGP 3.65 to EGP 5.50.
Moreover, the price of gasoline 95 increased from EGP 6.60 to EGP 7.75, marking a 17% increase, while liquefied natural gas cylinders increased by 66% to reach EGP 50, up from EGP 30.
Egypt adopted its economic reform programme in November 2016, which included the currency flotation, resulting in the pound losing about 50% of its value; implementing the value-added tax; and reducing energy subsidies, which caused inflation to reach a historically high level of over 33% in July.