** #4 Egypt reaches staff-level agreement with IMF on fifth loan tranche: Egypt reached a staff-level agreement with the IMF yesterday on the fifth USD 2 bn tranche of its USD 12 bn extended fund facility after a delegation led by Egypt Mission Chief Subir Lall completed its fourth review of the government’s economic reform program. The delegation found that “the Egyptian economy continued to perform well, despite less favorable global conditions, supported by the authorities’ strong implementation of the reform program,” Lall said in a statement issued yesterday. The amount, which brings total payments under the program to USD 10 bn, will be disbursed after the IMF’s executive board signs off on the agreement. Finance Minister Mohamed Maait had previously said to expect that to happen in early 2019.

What’s going right: Driving the delegation’s decision are strong indicators of a promising outlook, including:

• improvements in GDP growth levels;
• a narrower current account deficit;
• lower unemployment rates;
• lower government debt levels relative to GDP.

The central bank’s tight monetary policy and flexible exchange rate regime are also expected to help “cushion [Egypt] against external shocks,” while the government’s fiscal policy is seen “keeping general government debt on a clearly declining path” to achieve a primary surplus for the first time in years. The delegation also took note of authorities’ commitment to energy subsidy reform and expanding social welfare coverage, as well as efforts to combat corruption and boost transparency.