The IMF has approved a $1.2 billion disbursement to Egypt after reviewing its $8 billion economic reform programme. This includes an additional $1.3 billion from the Resilience and Sustainability Facility. Egypt’s primary budget surplus target has been adjusted to 4% of GDP for 2025/26. Financial reforms are aiding stabilization amidst high inflation and currency shortages, with the latest funding helping manage approximately $20 billion in maturing domestic treasury bills.
The International Monetary Fund (IMF) has sanctioned a disbursement of $1.2 billion to Egypt following the successful conclusion of the fourth review of the nation’s $8 billion economic reform programme. This approval comes after Egypt received a waiver regarding its primary budget surplus target, enhancing flexibility in fiscal management.
Furthermore, the IMF’s executive board has granted Cairo’s request for a Resilience and Sustainability Facility arrangement, allowing access to an additional $1.3 billion in funding, which Egypt initially sought in 2022. This funding is aimed at bolstering the nation’s financial position amidst fiscal pressures.
As part of this latest agreement, adjustments were made to Egypt’s fiscal commitments—specifically, the primary budget surplus, excluding proceeds from asset sales, is expected to reach 4% of GDP for the fiscal year beginning July 1, 2025. This revised target represents a 0.5% decrease from the originally set goal.
The IMF’s statement highlighted, “The Executive Board approved the authorities’ request to recalibrate the authorities’ medium-term fiscal commitments.”, indicating significant recognition of Egypt’s economic challenges. The upcoming fiscal year is crucial as Egypt continues to combat high inflation and foreign currency shortages exacerbated by declining Suez Canal revenues and reduced natural gas production.
Recent IMF-backed reforms have contributed to economic stabilization, illustrated by a drop in annual urban consumer price inflation from 24.0% in January to 12.8% in February. The latest financial assistance from the IMF is anticipated to aid Egypt in addressing immediate financial responsibilities, particularly in rolling over about $20 billion in domestic treasury bills maturing this month, much of which is held by foreign investors.
This fresh funding from the IMF is essential for stabilizing Egypt’s economy, facilitating fiscal reforms, and rebuilding investor confidence amid persistent economic challenges. Such measures are critical for supporting the country’s path toward sustainable economic growth through continued reforms.
The IMF’s approval of a $1.2 billion disbursement and an arrangement for an additional $1.3 billion funding is a significant development for Egypt’s economic reform efforts. By recalibrating fiscal commitments and responding to ongoing economic challenges, these measures are expected to stabilize the economy, support crucial reforms, and enhance investor confidence. As Egypt navigates high inflation and currency shortages, such support from the IMF is deemed essential for the country’s financial stability and growth aspirations.
Original Source: www.arise.tv
