Cairo – Mubasher: Slashing fuel subsidies in Egypt is expected to raise energy efficiency and guard the budget against unprecedented fluctuations in oil prices, the International Monetary Fund’s (IMF) acting managing director and chairman David Lipton said in a report.
Lowering subsidies allocated for fuel under the most populous Arab nation’s economic reform programme will also provide fiscal space for social spending, Lipton added.
“Improved revenue mobilisation is also essential to create room for spending in health, education, and social protection,” he noted.
Meeting a primary surplus target of 2% of the country’s gross domestic product (GDP) also helped to “anchor a further decline in the public-debt-to-GDP ratio,” the top official pointed out.
“Monetary policy remains anchored by the medium-term objective of bringing inflation to single digits. Core inflation appears to be well contained, but the central bank should remain cautious until disinflation is firmly entrenched,” he added.
On Wednesday, the IMF approved to provide Egypt with the last $2 billion tranche of its $12 billion loan.
