URGENT: IMF’s board clears $2.3 bln for Egypt after programme reviews
The International Monetary Fund (IMF) approved a fresh disbursement of about $2.3 billion to Egypt on Thursday after completing key reviews of the country’s economic reform programme.
The fund’s Executive Board signed off on the fifth and sixth reviews of Egypt’s Extended Fund Facility and the first review under the Resilience and Sustainability Facility, enabling immediate access to roughly $2 billion under the EFF and $273 million under the RSF.
“Implementation under the RSF—which supports reforms to accelerate decarbonisation, strengthen environmental risk management, and enhance climate resilience—is progressing well.” IMF said in an emailed statement. “The authorities have completed two key reform measures, including publication of an implementation schedule for renewable energy targets and issuance of a directive requiring banks to monitor and report exposure to climate transition risks.”
The IMF further said Egypt’s macroeconomic conditions have improved as tight monetary and fiscal policies, along with exchange rate flexibility, helped curb inflation, strengthen the external position and restore market confidence. Annual inflation fell to 11.9 per cent in January 2026, while foreign reserves rose to about $59.2 billion by the end of 2025.
Economic growth accelerated to 4.4 per cent in fiscal year 2024/25, supported by a broad-based recovery, strong remittances and tourism receipts, and increased foreign investment, the fund said. The current account deficit narrowed to 4.2 per cent of GDP, reflecting improved external balances.
Despite the progress, the IMF warned that implementation of deeper structural reforms has been uneven, particularly efforts to reduce the state’s role in the economy and advance the divestment programme. High public debt and large financing needs continue to weigh on fiscal space and medium-term growth prospects.
“The authorities’ stabilisation measures continue to take effect,” Deputy Managing Director Nigel Clarke said in a statement, noting that fiscal consolidation and exchange rate flexibility have helped contain demand pressures and improve external buffers.
However, he stressed that faster progress on divestment in non-strategic sectors, stronger debt management, and broader tax reforms are essential to crowd in private investment and support inclusive growth.
The IMF said Egypt’s priorities include maintaining exchange rate flexibility, completing disinflation, strengthening domestic revenue mobilisation and implementing a comprehensive debt strategy while protecting vulnerable groups through targeted social spending.
Risks remain from regional geopolitical tensions, tighter global financial conditions and delays in energy and structural reforms, the fund said. However, a rebound in Suez Canal activity, higher hydrocarbon production and Gulf-backed mega projects could bolster growth and foreign investment.
Attribution: Amwal Al Ghad English