By Kanishka Singh and Aidan Lewis
Exciting news from the International Monetary Fund (IMF)! Egypt has successfully completed a review that allows the country to access $820 million in funds. The IMF acknowledged the efforts made by Egypt to restore macroeconomic stability, indicating that these efforts are already showing positive results. However, the IMF also emphasized the importance of making more progress in reining in state-owned enterprises.
This review marks a significant milestone in Egypt’s latest 46-month IMF loan programme, which was initially approved in 2022. This year, the loan was expanded to $8 billion in response to an economic crisis characterized by high inflation and severe foreign currency shortages.
One notable achievement highlighted by the IMF is Egypt’s shift to a flexible exchange rate regime, a policy that remains a key component of the authorities’ program. The IMF also noted that inflationary pressures are easing, foreign exchange shortages have been resolved, and fiscal targets have been met, including those related to spending on large infrastructure projects.
While recognizing progress in critical structural reforms, the IMF emphasized the need for greater efforts in implementing the State Ownership Policy (SOP). Specifically, Egypt was urged to accelerate the divestment of state-owned enterprises and enact reforms to prevent unfair competitive practices.
Additionally, Egypt was advised to address fiscal risks in the energy sector, particularly in response to declining production that has led to daily power cuts. The IMF underscored the importance of restoring energy prices to their cost recovery levels by December 2025 to ensure stable energy provision to the population and reduce imbalances in the sector.
Notably, Egypt had raised domestic fuel prices by up to 15% prior to the IMF review, which had been postponed from July 10.
