EXCLUSIVE: Senior IMF official says Egypt loan review still underway

Negotiations between Egypt and the International Monetary Fund (IMF) over the first and second reviews of Egypt’s reform programme under a $3 billion loan are still underway, senior IMF official told Amwal Al Ghad English on Wednesday.

Jihad Azour, director of the IMF’s Middle East and Central Asia Department, made these remarks during a virtual press conference on the Regional Economic Outlook for the Middle East and North Africa, January 2024 Update.

In December 2022, IMF’s executive board approved a 46-month arrangement of around $3 billion under the Extended Fund Facility (EFF) to Egypt.

Negotiations between the Egyptian authorities and the IMF team have made “progress”, Azour added. The mission was still in negotiations over the first and second reviews of the loan programme, which was approved in December 2022, the IMF official said. The programme remains anchored on the same three main pillars. First, exchange rate and monetary policies shall be focused on a permanent shift to a flexible exchange rate regime so as to help absorb external shocks and rebuild reserves while gradually reducing inflation. Second, continued fiscal discipline and fiscal structural policies that aim to maintain market confidence and ensure the downward trajectory of the debt to GDP ratio while strengthening the budgetary process, boost transparency, and improve the budget composition so as to allow for an expansion in social spending. Third, a structural reform agenda will help promote private sector investment and secure strong and inclusive medium-term growth, including through reducing the role of state in generating economic activity, levelling the playing field between state-owned enterprises and private firms, and removing barriers to trade.