IMF Grants $1.2 Billion Disbursement to Egypt Following Program Review
The IMF has approved a $1.2 billion disbursement to Egypt following the fourth review of its economic reform program. Additionally, Egypt is set to receive about $1.3 billion under the Resilience and Sustainability Facility. Adjustments to fiscal commitments target a primary budget surplus of 4% of GDP for fiscal year 2025/26. This funding will assist Egypt in managing financial obligations amid economic challenges.
The International Monetary Fund (IMF) has authorized the disbursement of $1.2 billion to Egypt after completing its fourth review of the country’s $8 billion economic reform plan. This decision follows the granting of a waiver regarding Egypt’s primary budget surplus target.
Additionally, the IMF’s executive board approved Egypt’s request for assistance under the Resilience and Sustainability Facility, which provides approximately $1.3 billion in funding. Egypt had sought assistance from this facility since 2022 to bolster its economic position.
In the latest agreement, Egypt’s fiscal commitments were adjusted. The revised primary budget surplus, excluding proceeds from asset sales, is anticipated to attain 4% of GDP in the fiscal year 2025/26, starting on July 1, 2025. This new target is 0.5% lower than previously outlined in Egypt’s IMF programme.
The IMF stated, “The Executive Board approved the authorities’ request to recalibrate the authorities’ medium-term fiscal commitments,” noting the expected primary balance surplus. The reassessment of fiscal targets reflects Egypt’s current economic realities amid ongoing challenges.
Egypt is grappling with high inflation and foreign currency shortages, intensified by a significant decline in Suez Canal revenues due to regional instability and reduced natural gas production. Recent reforms associated with the IMF programme have begun to stabilize the economy, as evidenced by a reduction in annual urban consumer price inflation from 24.0% in January to 12.8% in February.
The IMF’s recent funding approval, combined with the support from the resilience and sustainability facility, aims to assist Egypt in managing its immediate financial obligations. Experts believe this support will aid the country in refinancing approximately $20 billion in domestic treasury bills maturing this month, many of which are held by foreign investors.
Overall, this new IMF funding is a vital measure for stabilizing Egypt’s economy, reinforcing fiscal reforms, and restoring investor confidence in the midst of persistent economic difficulties.
In conclusion, the IMF’s approval for the $1.2 billion disbursement and additional funding from the Resilience and Sustainability Facility represents a significant development for Egypt’s economy. The adjustments to fiscal targets reflect a response to current economic challenges, including high inflation and currency shortages. The support aims to stabilize the economy and enhance investor confidence as Egypt navigates its financial obligations amidst ongoing reforms.
Original Source: www.arise.tv
