The International Monetary Fund (IMF) has taken swift action by disbursing $820 million to the Egyptian government, a crucial step in the $3 billion aid program aimed at stabilizing the nation’s economy during challenging times.
The IMF’s Executive Board approved the disbursement as part of a $3 billion aid program initiated in late 2022, with an additional $5 billion extension sanctioned earlier this month, bringing the total IMF lending to Egypt to $8 billion.
IMF Managing Director Kristalina Georgieva expressed confidence in Egypt’s progress, stating, “The authorities have significantly strengthened the reform package,” particularly highlighting recent measures such as exchange rate unification and substantial fiscal and monetary policy adjustments.
Egypt’s economy has faced mounting difficulties, including inflationary pressures and foreign currency reserve challenges. The recent rate hike by the central bank and efforts to align official exchange rates with market rates reflect Egypt’s commitment to stabilizing its economy.
However, challenges persist, exacerbated by external factors like the pandemic, conflicts in Ukraine and Gaza, and disruptions in the Suez Canal due to Yemen’s Huthi rebel attacks. These challenges have impacted foreign currency earnings and heightened economic vulnerabilities.
President Abdel Fattah al-Sisi’s ambitious projects, while aiming for economic growth, have also led to increased foreign debt, raising concerns about financial sustainability.
Despite these challenges, the IMF projects a more optimistic outlook for Egypt, with an expected economic growth rate of 4.4 percent in the upcoming fiscal year, a significant improvement compared to the current year’s 3 percent projection.
