IMF and Egypt Forge Path to Economic Stability

The IMF has reached a staff-level agreement with Egypt on the reviews under its Extended Fund Facility, potentially releasing $2.5 billion. The agreement also covers the first review of the Resilience and Sustainability Facility, potentially unlocking $1.3 billion more. Egypt's inflation has decreased significantly, showcasing economic improvement.

The International Monetary Fund (IMF) announced that it reached a staff-level agreement with Egypt on Tuesday under its Extended Fund Facility arrangement, potentially unlocking $2.5 billion. This agreement combines the fifth and sixth reviews of Egypt's economic support program, allowing authorities additional time to meet key objectives.

Additionally, the IMF agreed on the first review of the Resilience and Sustainability Facility, potentially granting Egypt access to another $1.3 billion. These agreements await approval by the IMF's executive board. The $8 billion, 46-month loan, agreed upon in March 2024, assists during a period of high inflation and foreign currency shortages in Egypt.

Recent developments show Egypt stabilizing its economy, with inflation reduced from 38% in September 2023 to 12.3% in November. The easing of foreign currency shortages is aided by the IMF loan program, record tourism revenues, and investment deals with Gulf nations. However, the need for accelerated structural reforms and state asset divestment remains crucial, as stated by Vladkova Hollar, IMF Mission Chief for Egypt.

(With inputs from agencies.)