IMF grants Egypt $2.5B in funding as economic reform continues

The International Monetary Fund (IMF) has approved a $1.2 billion disbursement to Egypt, completing the fourth review of Cairo’s $8 billion economic reform programme, the lender announced on Tuesday.

The IMF also granted Egypt access to an additional $1.3 billion under its resilience and sustainability facility, bringing total new funding to $2.5 billion.

The approval comes after the IMF allowed Egypt to waive its primary budget surplus target, revising the country’s fiscal commitments. The primary balance surplus is now expected to reach 4% of GDP in the 2025/26 fiscal year, beginning July 1.

Key Developments:

• Egypt requested the new financing in 2022, seeking more support for economic stability.
• Inflation drops: Cairo reported annual inflation nearly halved in February, falling from 24.0% to 12.8% following financial reforms tied to the IMF deal.
• Foreign currency struggles: Declining Suez Canal revenues and lower natural gas production have worsened economic pressures.
• Debt management: The IMF funding is expected to help Egypt roll over $20 billion in domestic treasury bills maturing this month, many of which are held by foreign investors.

The IMF programme, signed in March 2024, aims to stabilize Egypt’s economy, which has been hit by high inflation, currency shortages, and regional trade disruptions.

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