CAIRO (Reuters) – Egypt’s economy will grow by 3.5 percent during the 2016-17 financial year, the International Monetary Fund said on Tuesday, lowering the 4 percent forecast it made in a report last year.

The IMF last November agreed to provide Egypt with a three-year, $12 billion loan as part of an ambitious economic reform programme that includes levying new taxes and cutting energy subsidies.

“In Egypt, comprehensive reforms are expected to deliver sizable growth dividends, lifting growth from 3.5 percent in 2017 to 4.5 percent in 2018,” the IMF said in its World Economic Outlook on Tuesday, in which it raised its overall global growth forecast. [nL1N1HQ0XS]

The 2017 figure, which refers to the 2016-17 fiscal year ending in June, is lower than what the international lender had expected in a report around the time Egypt accepted the loan. It is also a drop from the 4.3 percent the North African country recorded in 2015-16.

The report did not provide a reason for the downward revision.

Egypt has been hit by soaring inflation since it floated its currency in November, allowing it to roughly halve in value. Urban consumer inflation hit 30.9 percent year-on-year in March, its highest in decades, though month-on-month inflation has slowed. [nL8N1HI29X]

(Reporting by Eric Knecht; editing by Andrew Roche)