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Egypt on track to end fuel subsidies — IMF

Egypt on track to end fuel subsidies — IMF

Egypt is on track to end subsidies on most fuels by June 15 as part of a reform programme led by the International Monetary Fund (IMF), the Washington-based body said.

The economy of the Arab world’s most populous country has suffered from political instability and security threats since the 2011 uprising.

Cairo secured a $12 billion, three-year loan package from the IMF in 2016.

Egyptian authorities “remain committed” to ending subsidies granted to limit prices at the pump, the IMF said in a new report.

The prices of liquefied petroleum gas (LPG) and fuels used in bakeries and for electricity generation would not be affected, it added.

Bread is a staple in Egypt and a price hike could spark further discontent in the face of continued economic woes.

The IMF said cutting the subsidies is “critical to encourage more efficient energy use” and to “create fiscal space for high-priority spending on health and education”.

In February, the IMF approved the next $2 billion loan payment to Cairo, citing “substantial progress” made by Egyptian authorities on reforms, which have boosted growth and cut unemployment.

But IMF chief Christine Lagarde at the time also urged Egypt “to press ahead with structural reforms that facilitate private sector-led growth and job creation”.

The latest installment brought the total paid to Egypt to about $10 billion since the loan deal was signed in November 2016.