The International Monetary Fund announced on Wednesday that it had completed two reviews of Egypt’s economic reform program and another review under the Resilience and Sustainability Facility (RSF), allowing the country to draw down about $2.3 billion.
The IMF said Egypt will receive about $2 billion in a 46-month loan program and $273 million in RSF after the completion of the fifth and sixth rounds of reviews, bringing total disbursements under both programs to about $5.2 billion.
Egypt agreed to a $3 billion loan with the IMF in December 2022. The program was expanded to $8 billion in March 2024, as the country faced high inflation and foreign exchange shortages. This program is scheduled to end in December.
In recent months, Egypt has managed to contain inflation, which peaked at 38% in September 2023. Annualized urban consumer inflation was 11.9% in January.
The country’s foreign currency shortage has also eased, backed by IMF loans, record tourism receipts, remittances from Egyptians working abroad and tens of billions of dollars worth of investment deals with Gulf countries, including the United Arab Emirates.
“Egypt’s macroeconomic situation has improved amid sustained stabilization efforts,” the IMF said in a statement. “Monetary tightening and fiscal policy, coupled with exchange rate flexibility, have helped restore macroeconomic stability, control inflation, and strengthen our external position.”
However, the IMF warned that structural reforms were “uneven”, citing the sale of state-owned assets, which is a centerpiece of the financing deal, and the fund believes progress is slow.
“Progress on efforts to reduce the country’s footprint, particularly on divestment plans, has been slower than expected, while high public debt levels and rising aggregate financing needs continue to constrain fiscal space and weigh on medium-term growth prospects,” the IMF said.
In August, Egypt ratified legal reforms aimed at accelerating the sale of state-owned assets.
(Reporting by Chris Thomas in Mexico City and Hatem Maher in Cairo; Editing by Jacqueline Wong and Thomas Derpinghaus)
