Egypt will need to widen its tax base and streamline tax exemptions, despite making good progress in expanding its economy, the International Monetary Fund (IMF) said in a statement.
The fund completed its fifth review under the extended fund facility (EFF) earlier this month.
While there is macroeconomic stabilisation, Egypt needs to accelerate and deepen reform efforts to reduce the state’s footprint, level the playing field and improve the business environment.
Discussions will continue to finalise an agreement on the remaining policies and reforms that could support the completion of the fifth review, IMF mission chief for Egypt, Vladkova Hollar, said in a statement.
The IMF approved the fourth review in March, allowing the disbursement of $1.2 billion in a 46-month loan programme approved in 2022 and later expanded to $8 billion.
In April, the IMF projected Egypt’s economy to grow by 3.8 percent in 2025. However, the World Bank increased its growth forecast to 4.2 percent for 2025-2026 from 3.5 percent in 2024-2025. The financial year begins in July.
Private investment share of total investment rose from 38.5 percent in the first half of 2023/24 to almost 60 percent over the same period in 2024-25, Hollar said. However, inflation rose slightly to 13.9 percent in April but remains on a downward trend.
“It is critical for Egypt to carry out deeper reforms to unlock the country’s growth potential, create high-quality jobs for a growing population, and sustainably reduce its vulnerabilities and increase the economy’s resilience to shocks,” Hollar said.
