IMF approves disbursement of a new tranche to Egypt worth $1.77 billion
Cairo, July 31 (KUNA) -- The International Monetary Fund (IMF) approved on Friday the disbursement of a new tranche to Egypt worth $1.77 billion as part of an $8 billion loan program agreed upon in March 2024 to assist the Egyptian government in implementing economic reforms.
Amin Maiti, head of the IMF mission to Egypt, said at a press conference that the financing includes approximately $1.5 billion under the Extended Fund Facility, in addition to about $272 million following the completion of the seventh review of the program and the first review of the Resilience and Sustainability Facility (RSF).
Maiti predicted that Egypt would receive the new tranche on August 3, noting that the value of the financing allocated to the RSF was doubled after Egypt implemented a series of reforms ahead of the scheduled deadline.
He affirmed that the Egyptian economy demonstrated resilience in containing the indirect repercussions of the war in the Middle East, benefiting from the implementation of a more flexible exchange rate, gradual increases in fuel prices, and cuts in government spending, which have strengthened macroeconomic stability compared to previous periods of turmoil.
He added that the economy still faces challenges, including high public debt, significant financing needs, the continued extensive role of the state in economic activity, and the slow implementation of structural reforms aimed at enhancing the role of the private sector.
Maiti called for accelerating the reform program, particularly regarding government divestment initiatives and creating space for the private sector, to boost economic competitiveness and attract further investments.
He clarified that the Egyptian economy remains vulnerable to fluctuations in global oil prices, noting that every $10 increase in the price of a barrel of oil raises the fiscal deficit by approximately 0.3 percent of GDP.
The head of the IMF mission in Egypt welcomed the resumption of the automatic fuel pricing mechanism, which adjusts prices every three months to align them closer to global costs. He considered that maintaining a quarterly increase cap not exceeding 10 percent provides protection for consumers.
Egypt signed an agreement with the IMF in December 2022 to obtain a $3 billion loan, before the program was expanded to $8 billion in March 2024 to support the economy and address the foreign currency crisis and high inflation rates. (End) M.M. / F.A.S.
