{
  "title": "IMF Executive Board Concludes 2017 Article IV Consultation and Completes Second Review under the Extended Fund Facility with the Arab Republic of Egypt",
  "publication": "IMF News, December 20, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/12/20/pr17511-second-review-under-the-extended-fund-facility-with-egypt",
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  "summary": "The Executive Board completed the second review of Egypt’s economic reform program under an Extended Fund Facility (EFF) and approved a disbursement equivalent to SDR 1,432.76 million (about US$2.03 billion), bringing total disbursements to SDR 4,298.29 million about US$6.08 billion.",
  "publishDate": "2017-12-20",
  "sections": [
    {
      "heading": "Program status and financing",
      "content": "- The Executive Board completed the second review of Egypt’s economic reform program under an Extended Fund Facility (EFF) and approved a disbursement equivalent to SDR 1,432.76 million (about US$2.03 billion), bringing total disbursements to SDR 4,298.29 million about US$6.08 billion.\n- The three-year EFF arrangement equals SDR 8.597 billion (about US$12 billion at the time of approval, or 422 percent of quota) and was approved on November 11, 2016.\n- In completing the review, the Executive Board approved the authorities’ request for modifications of:\n  - the end-December 2017 and end-June 2018 performance criterion for net domestic assets, and\n  - the end-June 2018 performance criterion for the primary fiscal balance."
    },
    {
      "heading": "Macroeconomic assessment and outlook (summary of IMF statement)",
      "content": "- The reform program is yielding encouraging results: GDP growth is recovering, inflation is moderating, fiscal consolidation remains on track, and international reserves are at their highest level since 2011.\n- The banking system has remained resilient to moderate shocks.\n- The authorities are committed to a floating exchange rate regime, which serves as a buffer against external shocks; the CBE’s fee upon entry for the repatriation mechanism could help enhance pound flexibility.\n- Monetary policy:\n  - The Central Bank of Egypt (CBE) tightened policy early in the year to reverse high inflation.\n  - Continued disinflation could allow gradual easing of interest rates, but the CBE should remain vigilant and be prepared to tighten if demand pressures reemerge.\n  - In the medium term, the CBE plans to move to an inflation-targeting framework to achieve low and stable inflation.\n- Fiscal policy and public debt:\n  - Fiscal consolidation aims to place government debt on a declining trajectory.\n  - The primary surplus targets for 2017/18 and 2018/19 are judged achievable but subject to risks, including from higher oil prices.\n  - Continued reform of energy subsidies is critical for achieving fiscal objectives.\n  - Over the medium term, tax policy reforms and modernization of tax and customs administration are needed to create fiscal space for investment in human capital and infrastructure.\n  - Moving further away from product subsidies to better-targeted cash transfers would strengthen the social safety net.\n- Structural reform priorities to raise growth potential and job creation:\n  - Improve allocation of resources and the business climate for private sector development.\n  - Reform the regulatory framework and strengthen competition.\n  - Improve access to finance and land.\n  - Strengthen governance, transparency, and accountability of state-owned enterprises.\n  - Fight corruption.\n  - Better integrate women and young people in the labor market."
    },
    {
      "heading": "Key statistics from Table 1 (selected series, values preserved as presented)",
      "content": "- Real GDP (market prices): 4.4, 4.3, 3.5, 4.2, 4.5, 4.8, 5.3, 5.5\n- Consumer prices (end of period): 11.4, 14, 32.8, 29.8, 10.3, 11.9, 15.7, 15.2\n- Consumer prices (period average): 11, 10.2, 23.9, 23.5, 22.1, 21, 13.7\n- Gross Debt: 88.5, 96.9, 98.4, 103.3, 87.7, 91.3, 86.4, 86.7\n  - External: 7.8, 20.8, 18.1, 19.1, 16.7, 19.2, 17.7, 19.2\n  - Domestic: 80.5, 89, 77.7, 85.2, 68.6, 74.6, 67.2, 69\n- Budget sector:\n  - Revenue and grants: 19, 18.2, 18.8, 18.6, 18.7\n  - Expenditure (incl. net acquisition of financial assets): 30.5, 30.2, 28.7, 29.7, 27.3, 28, 25.3, 26.1\n  - Of which: Energy subsidies: 4, 3, 3.9, 4.1, 3.1, 1.4, 1.2\n  - Overall balance: -11.4, -12.5, -10.5, -10.9, -8.5, -9.2, -6.7, -7.4\n  - Overall balance, excl. grants: -12.7, -8.6, -7.5\n  - Primary balance: -3.5, -1.8, 0.4, 0.2, 2.1\n- Monetary sector:\n  - Credit to the private sector: 14.2, 37.8, 38, 8.7, 10.5, 13, 16.1\n  - Reserve money 6/: 33.3, 29.3, 26.8, -7.8, 24.5, 39.4, 12.7, 14.7\n  - Broad money (M2): 16.4, 35.2, 39.3, 22.2, 20.4, 23, 19.7\n  - Treasury bill rate, 3 month (average, in percent): 11.8, 17.5, 21.3, 17.4, 9, 8.8\n- External sector:\n  - Exports of goods (in US$, percentage change): -14.7, -15.9, 15.9, 9.9, 7\n  - Imports of goods (in US$, percentage change): 1.9, -6.4, -0.1, -0.5, 7.6\n  - Merchandise trade balance: -9.7, -14.6, -11.2, -13.7, -13.1, -8.7\n  - Current account: -3.7, -6, -5.8, -6.1, -4.6, -4.5, -3.8, -4\n  - Capital and financial account (incl. errors and omissions): 5.1, 4.7, 5.2, 3.2, 2.4, 1.6\n  - Foreign direct investment (net, in billions of US$): 6.2, 6.8, 7.7, 9.4, 8.4\n  - External debt 4/: 14.5, 16.8, 31.6, 30.8, 34.6, 26.2, 30.3\n  - Gross international reserves (in billions of US$): 19.5, 17.1, 31, 30.7, 34.5, 33\n  - In months of next year's imports of goods and services: 5.4, 5.7\n  - In percent of short-term external debt 5/: 281, 158, 117, 98, 125, 108.3, 76.9\n  - Financing gap (in billions of US$): …, 0, 1.7, 2.6\n- Memorandum items:\n  - Nominal GDP (in billions of Egyptian pounds): 2,444, 2,708, 3,496, 3,478, 4,465, 4,418, 5,336.80, 5,292.20\n  - Nominal GDP (in billions of US$): 332, 256\n  - GDP per capita (in US$): 3,731, 3,685, 2,704\n  - Unemployment rate (period average, percent): 12.9, 12.6, 12.1, 11.2, 10.7\n  - Poverty rate (percent): 27.8\n  - Population (in millions): 90.2, 92.3, 94.8, 94.4, 97, 96.6, 99.2\n\nSource: IMF Executive Board press release, December 20, 2017.\n\n---\n\n\n References\n\n- Questions and Answers\n- The Executive Board\n- David Lipton\n- PRESS CENTER\n- No. 16/501\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/12/20/pr17511-second-review-under-the-extended-fund-facility-with-egypt"
    }
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    "Published: December 20, 2017",
    "The Executive Board completed the second review of Egypt’s economic reform program under an Extended Fund Facility (EFF) and approved a disbursement equivalent to SDR 1,432.76 million (about US$2.03 billion), bringing total disbursements to SDR 4,298.29 million about US$6.08 billion.",
    "The three-year EFF arrangement equals SDR 8.597 billion (about US$12 billion at the time of approval, or 422 percent of quota) and was approved on November 11, 2016.",
    "In completing the review, the Executive Board approved the authorities’ request for modifications of:",
    "The reform program is yielding encouraging results: GDP growth is recovering, inflation is moderating, fiscal consolidation remains on track, and international reserves are at their highest level since 2011.",
    "The banking system has remained resilient to moderate shocks.",
    "The authorities are committed to a floating exchange rate regime, which serves as a buffer against external shocks; the CBE’s fee upon entry for the repatriation mechanism could help enhance pound flexibility.",
    "Monetary policy:",
    "Fiscal policy and public debt:",
    "Structural reform priorities to raise growth potential and job creation:",
    "Real GDP (market prices): 4.4, 4.3, 3.5, 4.2, 4.5, 4.8, 5.3, 5.5",
    "Consumer prices (end of period): 11.4, 14, 32.8, 29.8, 10.3, 11.9, 15.7, 15.2",
    "Consumer prices (period average): 11, 10.2, 23.9, 23.5, 22.1, 21, 13.7",
    "Gross Debt: 88.5, 96.9, 98.4, 103.3, 87.7, 91.3, 86.4, 86.7",
    "Budget sector:",
    "Monetary sector:",
    "External sector:",
    "Memorandum items:",
    "[Questions and Answers](https://www.imf.org/en/countries/egy/egypt-qandas)",
    "[The Executive Board](http://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[David Lipton](http://www.imf.org/external/np/omd/bios/dl.htm)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[No. 16/501](https://www.imf.org/en/News/Articles/2016/11/11/PR16501-Egypt-Executive-Board-Approves-12-billion-Extended-Arrangement)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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