Egypt is confident it can achieve a primary budget surplus for the first time years in FY2017-18 and is working to reduce government debt to 98% of GDP, Vice Minister of Finance Ahmed Kouchouk told the IMF delegation in town reviewing progress on the economic reform agenda. Positive indicators from the first quarter of the fiscal year support that confidence, according to minister Amr El Garhy, who said that the primary budget deficit dropped to 0.2% of GDP in 1QFY2017-18, from 0.6% last year, while government earnings rose 33.2% y-o-y for the period, and spending increased a prudent 24.4% y-o-y. The delegation has held several meetings with El Garhy and other ministry officials to complete an assessment of the reform program before unlocking a third USD 2 bn tranche of Egypt’s USD 12 bn extended fund facility, but decided to extend its stay, which was meant to end on Tuesday, to meet with other government officials once they return from the World Youth Forum, Al Shorouk says.

The delegation met with Oil Minister Tarek El Molla this week, sources tell the newspaper. On the agenda were increasing natural gas production, progress on subsidy reduction, and arrears to international oil companies. The cabinet had said on various occasions that the year would not see any additional cuts to fuel subsidies.