IMF board approves $12bn Egypt bailout

Posted on November 11, 2016

The International Monetary Fund’s executive board has approved a $12bn bailout of Egypt to buttress the government’s finances and help the Arab world’s most populous country restore some vim to its economy.

Egypt’s economy has struggled since the Arab Spring that ousted the government led by Hosni Mubarak. His successors have intermittently flirted with the IMF since then as the government budget deficit has widened and the Egyptian pound come under severe pressure.

The government led by Abdel Fattah al-Sisi this year restarted talks with the Fund, and to win its support let the central bank float the currency – causing a sharp drop – and earlier this month raised petrol prices to trim the cost of subsidies.

The moves appear to have won the IMF’s economists around. The Fund said that $2.75bn would be immediately available to Egypt, with the rest disbursed over the three-year programme, contingent on five reviews of its ongoing economic reform package.

In a statement the IMF said:

The EFF-supported program will help Egypt restore macroeconomic stability and promote inclusive growth. Policies supported by the program aim to correct external imbalances and restore competitiveness, place the budget deficit and public debt on a declining path, boost growth and create jobs while protecting vulnerable groups.

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