The IMF has approved a $1.2 billion disbursement to Egypt after the fourth review of its $8 billion economic reform program. Additionally, a $1.3 billion arrangement under the Resilience and Sustainability Facility was sanctioned. Fiscal commitments have been adjusted with a primary surplus expected to reach 4% of GDP by 2025/26, aiding Egypt in managing financial obligations amidst current economic challenges.
The International Monetary Fund (IMF) has sanctioned a disbursement of $1.2 billion to Egypt, following the successful completion of the fourth review of the country’s $8 billion economic reform program. This approval comes alongside a waiver on Egypt’s primary budget surplus target.
Moreover, the IMF’s executive board has granted Egypt’s request for an arrangement through the Resilience and Sustainability Facility, which facilitates access to approximately $1.3 billion. The country initially sought financing under this facility back in 2022.
Under the latest agreement, Egypt’s fiscal commitments have been recalibrated, with the primary budget surplus anticipated to be 4% of GDP for the fiscal year 2025/26, commencing on July 1, 2025. This new target is a 0.5% reduction from the original IMF program target.
The statement from the IMF emphasizes, “The Executive Board approved the authorities’ request to recalibrate the authorities’ medium-term fiscal commitments.” The board specifically noted the expected primary balance surplus of 4% of GDP for the upcoming fiscal year.
Egypt continues to grapple with severe inflation and foreign currency shortages, significantly worsened by diminished Suez Canal revenues and a reduction in natural gas output. Nonetheless, recent financial reforms under the IMF-backed initiative have yielded considerable stability, demonstrated by a drop in urban consumer price inflation from 24.0% in January to 12.8% in February.
This latest financial injection from the IMF is anticipated to aid Egypt in managing its pressing financial obligations. Experts forecast that the disbursement will be instrumental in the renewal of around $20 billion in domestic treasury bills, many of which are held by foreign investors, set to mature this month.
This recent influx of funds is perceived as a pivotal action towards stabilizing Egypt’s economy, bolstering fiscal reforms, and rebuilding investor confidence amidst ongoing economic hurdles.
In summary, the IMF’s approval for a $1.2 billion disbursement and access to further funding through the Resilience and Sustainability Facility is a significant milestone for Egypt’s economy. While the country faces considerable economic challenges, including inflation and currency shortages, the recent reforms and financial support aim to stabilize the economic landscape. Concurrently, the adjustments to fiscal commitments reflect a strategic approach to achieving sustainable economic growth.
Original Source: www.arise.tv
