IMF reaches staff-level deal with Egypt that could unlock $1.6 billion
Baku, July 1, AZERTAC
The International Monetary Fund said on Monday it had reached a staff-level agreement with Egypt on reviews of two financing arrangements, potentially unlocking about $1.6 billion pending approval by the fund's executive board, according to Reuters.
The agreement would make available about $1.5 billion under Egypt's Extended Fund Facility and about $136 million under the Resilience and Sustainability Facility, bringing total disbursements under the arrangements to about $7.2 billion, the IMF said.
The IMF said the impact of the war in the Middle East on Egypt's economy had remained "relatively contained", helped by "timely and decisive" policy measures including fuel and electricity price adjustments, curbs on government energy consumption and spending reprioritisation.
Egypt's economy is still trying to absorb the impact of the U.S.-Israeli war on Iran, which has cast a shadow over its precarious economic stability, given its reliance on foreign portfolio inflows as a source of financing and gas imports as a key source of energy.
The IMF said real GDP growth reached 5% in the third quarter, bringing growth for the first three quarters of the fiscal year to 5.2%, while headline urban inflation remained elevated at 14.6% in May and was projected to rise to 15.8% by the end of the fiscal year.
It said Egypt should maintain tight monetary policy to contain renewed inflationary pressures and keep exchange rate flexibility as the "first line of defence" against external shocks, including spillovers from heightened geopolitical tensions.
The fund said Egypt's fiscal performance was strong, with primary balance and tax revenue targets exceeded by end-March, and projected the primary surplus to rise to 5% of GDP in the 2026/27 fiscal year from 4.8% in 2025/26.
The IMF said swift implementation of Egypt's State Ownership Policy, including faster divestment of state assets, would be critical to supporting private sector-led growth.
Earlier in June, Egypt's cabinet said it had granted four state-owned companies preliminary listings as part of its privatisation programme.
Egypt agreed to a $3 billion loan with the IMF in December 2022. The programme was expanded to $8 billion in March 2024, when the country was grappling with high inflation and foreign currency shortages.
Egypt's foreign reserves rose to $53.134 billion in May from $48.526 billion in May 2025, according to central bank data.
Other news in this section
