Reform of fuel subsidies in Egypt on track: IMF's report

CAIRO - 6 April 2019: The reform of fuel subsidies in Egypt is on track to be completed in the 2018/2019 fiscal year, according to a press release issued by the IMF on Saturday.

"The authorities are committed to reaching full cost recovery by the end of 2018/19 for all fuel products, except for LPG and fuel oil used in bakeries and electricity generation", the statement added, according to the fourth review of the Egyptian economy's performance.

The report noted that the external environment has shifted in recent months, posing new policy challenges. "The tightening of global financial conditions and heightened global risk aversion have contributed to a pullback by investors from emerging markets."

However, the statement asserted that the Egyptian authorities maintain their commitment to meeting the reform program’s objectives despite the new challenges.

Egypt embarked on a bold economic reform program that included the introduction of taxes, such as the value-added tax (VAT), and cutting energy subsidies, with the aim of trimming the budget deficit.

The country floated its currency in November 2016 before it clinched a $12 billion loan from the International Monetary Fund (IMF).