The Executive Board of the International Monetary Fund (IMF) approved today the disbursement of the fourth tranche of the IMF loan to Egypt worth $2bn, as part of the extended $12bn loan facility over three years.
The IMF’s approval followed the completion of the third review of the IMF’s economic reform programme, during their visit to Egypt in May, where the IMF praised the reforms implemented by the Egyptian government.
This brings the total of Egypt’s loan to $8bn, leaving the two parts of the third tranche to $4bn.
The Minister of Finance Mohammad Moait, said that the fourth tranche of the loan comes in the light of positive economic developments witnessed by Egypt and the success of the Egyptian government in implementing the Egyptian programme of economic and social reforms and its strong results especially in terms of restoring financial stability and improving economic growth rates.
The minister noted that the $8bn have been funnelled to improve the financial situation of the Egyptian economy and bridge the funding gap, which resulted in easing the need for foreign funding and re-generated large foreign exchange resources again.
The deputy minister of finance for fiscal policies and institutional development, Ahmed Kajok, said that the improvement in financial conditions is confirmed by the performance of the balance of payments, which continued to achieve a financial surplus worth $10.96bn in the first nine months of the fiscal year (FY) 2017/2018, while the trade balance deficit dropped by 57.5%, scoring a deficit of only $5.2bn, according to the Central Bank of Egypt.
He explained that this improvement also appeared in the state budget, which achieved a jump in performance during the FY 2017/2018 to a surplus of 0.1% of the GDP.
Moreover, he added that the Egyptian economy’s move and improved financial performance also clearly showed a breakthrough in tax revenues that would exceed its target and reach 104%.
He also stressed that the IMF’s tribute to the conditions of the Egyptian economy is a certificate of confidence and an important message to the investment community in Egypt and abroad to continue and complete investment plans in the country and the participation of investors in this economic success.
Moeit said that the Ministry of Finance is looking for a strong performance in foreign investments, as the volume of investments of foreigners in securities reached $19bn by the end of May.
He also noted that the ministry has completed a plan for tax reforms through to 2022, as a means to improve revenues and automate the system to achieve financial inclusion.