IMF believes Egypt’s reform results to be felt in 2018

CAIRO – 27 November 2017: The International Monetary Fund (IMF) is watching out the impact of increased international oil prices on Egypt, “if the prices continued on that level, it could create pressure on Egypt's budget,” IMF chief of mission Subir Lall said.

In an interview with "Hona Al-Asema" on CBC channel Sunday, Lall said that the mission will discuss the review with the IMF Executive Board and that the board is expected to approve it by late December, adding that this will be followed by the disbursement of the third $2 billion tranche.

"The annual inflation will noticeably go down in November and December as the base effect of last year’s depreciation of the pound will ease," Lall said, expecting inflation should go down steadily over the next year and into single digits by 2019.

“We are confident that positive results will be felt over the coming months and quarters, and that 2018 will be the year of transformation,” he said.

Speaking about interest rates, Lall said that high interest rates were necessary because of the high inflation, “the only way to reduce interest rates will be through reducing fiscal deficit and debt levels; it takes time but it is on the right track,” he added.

The IMF announced November 10 that its team, that visited Cairo from October 25 to November 9, has reached a staff-level agreement with the Egyptian authorities on the second review of Egypt’s economic reform program.

The mission held discussions on the 2017 Article IV Consultation with Egypt and the second review of Egypt’s economic reform program supported by a three-year IMF Extended Fund Facility, the fund said in a statement.

Once being approved by the IMF's Executive Board, the staff-level agreement would make available SDR 1,432.76 million (about $2 billion). This will bring the total disbursements under the program to about $6 billion.