IMF Approves $1.2 billion for Egypt

The International Monetary Fund (IMF) has approved the disbursement of $1.2 billion to Egypt following the fourth review of the country’s $8 billion economic reform program. The approval comes after Egypt was granted a waiver on its primary budget surplus target.

Additionally, the IMF’s executive board has endorsed Egypt’s request for a financing arrangement under the Resilience and Sustainability Facility, granting access to approximately $1.3 billion, the lender said in a statement. Egypt initially sought financing under this facility in 2022.

“The Executive Board approved the authorities’ request to recalibrate their medium-term fiscal commitments,” the IMF stated. The revised plan expects Egypt’s primary balance surplus—excluding divestment proceeds—to reach 4% of GDP in the upcoming fiscal year, which begins on July 1, 2025. The primary surplus was 0.5% of GDP lower than the target set in Egypt’s original IMF program.

Egypt has been facing high inflation and foreign currency shortages, exacerbated by a sharp decline in Suez Canal revenues due to regional tensions and declining natural gas production. The country agreed to the IMF program in March 2024.

On Monday, Egypt reported that annual headline inflation nearly halved in February, attributed to financial reforms implemented under the IMF agreement. Annual urban consumer price inflation fell to 12.8% in February from 24.0% in January.

The IMF’s latest disbursement and resilience facility financing are expected to aid Egypt in rolling over approximately $20 billion in domestic treasury bills maturing this month, analysts and bankers said. Many of these T-bills are held by foreign investors.

Reuters/Patience Ameh