IMF, Cairo agree to $12b loan to fix Egypt’s ailing economy

The International Monetary Fund signs an initial agreement with Egypt to loan it $12 billion over three years, in hopes the funds will help fix the ailing economy of the Arab world’s most populous country.

The IMF says the loan, which is subject to approval by its executive board, is in support of a government reform program that aims to alleviate the demand for black market dollar trading, bring down the budget deficit and government debt, as well as raise growth and create jobs.

“Egypt is a strong country with great potential but it has some problems that need to be fixed urgently,” the IMF says, adding that planned government measures include tax increases and cuts in energy subsidies. Egypt earlier this week already announced it would raise electricity prices by a least a quarter, a jump forward in its plans to eliminate the subsidies altogether by 2019.

— AP