IMF Approves $1.77 Billion Disbursement to Egypt
The International Monetary Fund (IMF) approved the disbursement of a new tranche of $1.77 billion to Egypt on Friday, as part of an $8 billion loan program agreed upon in March 2024 to assist the Egyptian government in implementing economic reforms.
Amin Maiti, the IMF’s Resident Representative to Egypt, said at a press conference that the financing includes approximately $1.5 billion under the Extended Fund Facility, along with 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 anticipated that Egypt would receive the new tranche on August 3, noting that the amount allocated for the RSF was doubled after Egypt implemented a series of reforms ahead of schedule.
The Egyptian economy has demonstrated resilience in absorbing the indirect impacts of the war in the Middle East, benefiting from 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.
However, the economy continues to face challenges, including high public debt, significant financing needs, the state’s continued dominant role in economic activity, and the slow pace 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 noted that the Egyptian economy remains vulnerable to fluctuations in global oil prices, explaining that every $10 increase in the price of a barrel of oil raises the fiscal deficit by approximately 0.3 percent of GDP.
The IMF chief welcomed the resumption of the automatic fuel pricing mechanism, which adjusts prices every three months to align with global costs, adding that maintaining a quarterly price increase cap of no more than 10 percent provides protection for consumers.
Egypt signed an agreement with the IMF in December 2022 for a $3 billion loan, which was expanded to $8 billion in March 2024 to support the economy and address the foreign currency crisis and high inflation rates.
