IMF completes Egypt reviews, unlocking about $2.3bn

The International Monetary Fund on Wednesday said it completed two reviews of Egypt‘s economic reform programme, as well as another review under the Resilience and Sustainability Facility (RSF), allowing the country to draw about $2.3 billion.

The IMF said Egypt will receive about $2 billion under its 46-month loan programme after completing the fifth and sixth reviews, along with $273 million under the RSF, bringing total disbursements under both programmes to about $5.2 billion.

Egypt agreed to a $3 billion loan with the IMF in December 2022. The programme was expanded to $8 billion in March 2024, at a time when the country was grappling with high inflation and foreign-currency shortages. The programme is due to end in December.

In recent months, Egypt has managed to tame inflation, which peaked at 38 percent in September 2023. Annualised urban consumer inflation stood at 11.9 percent in January.

The country’s foreign-currency shortage has also eased, supported by the IMF loan, record revenue from tourism, remittances from Egyptians working abroad and investment deals with Gulf countries — including the United Arab Emirates — worth tens of billions of dollars.

“Egypt’s macroeconomic situation has improved amid sustained stabilization efforts,” the IMF said in a statement. “Tight monetary and fiscal policies, together with exchange rate flexibility, have helped restore macroeconomic stability, reduce inflation, and strengthen the external position.”

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However, the IMF warned that structural reforms have been “uneven”, referring to the divestment of state assets — a centrepiece of the loan deal — where the fund believes progress has been slow.

“Efforts to reduce the state’s footprint, particularly progress on the divestment agenda, have been slower than envisaged, while high public debt and elevated gross financing needs continue to constrain fiscal space and weigh on medium-term growth prospects,” the IMF said.

In August, Egypt ratified legislative amendments aimed at accelerating the sale of state-owned assets.