The International Monetary Fund (IMF) has approved a $1.2 billion disbursement to Egypt after completing the fourth review of the country’s $8 billion economic reform program. The decision aims to support Egypt’s economic recovery as it faces ongoing financial challenges. Additionally, the IMF has granted Egypt access to $1.3 billion under the resilience and sustainability facility, which supports long-term financial and environmental stability. Egypt initially applied for this funding in 2022.
As part of the latest agreement, Egypt adjusted its fiscal targets. The IMF stated that the country’s primary budget surplus—excluding asset sales—is expected to reach 4/percent of GDP in the next fiscal year, starting July 1, 2025. However, this is 0.5/percent lower than the original target. The Egyptian economy has been under pressure due to declining Suez Canal revenues caused by regional tensions and a drop in domestic natural gas production. These factors have worsened economic conditions, adding to the challenges posed by high inflation and currency shortages.
Despite these difficulties, Egypt has shown signs of recovery. Inflation nearly halved in February, falling to 12.8/percent from 24.0/percent in January. Analysts attribute this improvement to financial reforms implemented under the IMF program. The IMF’s latest approval is expected to help Egypt meet its financial obligations, particularly the rollover of $20 billion in domestic treasury bills set to mature this month. Many of these are held by foreign investors, and the IMF’s backing could restore market confidence.
The IMF’s continued support signals confidence in Egypt’s economic reforms. However, sustaining long-term stability will require further structural adjustments, increased foreign investment, and ongoing efforts to strengthen financial policies.