IMF and Egypt Reach Agreement for $1.2 Billion Disbursement

The International Monetary Fund (IMF) announced on Wednesday that it has reached a staff-level agreement with Egypt for the fourth review under its Extended Fund Facility.

This agreement could pave the way for a $1.2 billion disbursement as part of the $8 billion, 46-month programme initiated in March.

Egypt has been grappling with soaring inflation and a severe foreign currency shortage, challenges further exacerbated by a sharp decline in Suez Canal revenues over the past year due to regional tensions.

As part of the agreement, Egypt’s government has committed to raising its tax-to-revenue ratio by 2% of its GDP over the next two years. The focus will be on removing tax exemptions rather than introducing new taxes.

The IMF highlighted that this fiscal adjustment would enable Egypt to allocate more resources for social spending, providing much-needed support to vulnerable groups amidst the ongoing economic challenges.

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