IMF Approves $1.2 Billion Disbursement to Egypt Following Economic Review

The IMF has approved a $1.2 billion disbursement to Egypt after the fourth review of its $8 billion economic reform program. The board also authorized $1.3 billion from the Resilience and Sustainability Facility. Egypt’s fiscal commitments were adjusted, expecting a 4% primary budget surplus by the 2025/26 fiscal year. The support aims to stabilize the economy amid challenges such as high inflation and foreign currency shortages.

The International Monetary Fund (IMF) has sanctioned a $1.2 billion disbursement to Egypt following the completion of the fourth review of the nation’s $8 billion economic reform initiative. Additionally, the IMF executive board has ratified Cairo’s request for an arrangement under the Resilience and Sustainability Facility, thereby providing Egypt with access to approximately $1.3 billion in funding, which was sought in 2022.

Under the new agreement, Egypt’s fiscal commitments have been revised, with the anticipated primary budget surplus—excluding revenue from asset sales—projected to reach 4% of GDP in the fiscal year 2025/26, starting on July 1, 2025. This target is 0.5% lower than initially outlined in Egypt’s IMF programme.

The IMF statement noted, “The Executive Board approved the authorities’ request to recalibrate the authorities’ medium-term fiscal commitments. In particular, the primary balance surplus (excluding divestment proceeds) is expected to reach 4% of GDP next fiscal year.” Egypt is currently facing challenges such as high inflation and foreign currency shortages, worsened by decreased Suez Canal revenues and reduced natural gas production.

However, structural reforms associated with the IMF-backed program have contributed to a degree of economic stabilization. Notably, Egypt reported a substantial decline in annual urban consumer price inflation, which fell from 24.0% in January to 12.8% in February.

The IMF’s approval, along with funding from the resilience and sustainability facility, is expected to facilitate Egypt’s management of its immediate financial obligations. Finance experts foresee that this disbursement will aid in rolling over approximately $20 billion in domestic treasury bills maturing this month, particularly those held by foreign investors.

Overall, this newly granted IMF funding represents a significant move towards stabilizing Egypt’s economy, bolstering fiscal reforms, and rebuilding investor confidence amid ongoing economic adversities.

In summary, the IMF’s approval of $1.2 billion to Egypt, along with additional funding through the Resilience and Sustainability Facility, marks a pivotal moment in supporting the nation’s economic reform agenda. Adjustments to fiscal commitments indicate a strategic approach to managing the nation’s economic challenges, particularly in light of previous inflation issues and currency shortages. The anticipated impact of this funding should enhance fiscal stability and encourage investor confidence.

Original Source: www.arise.tv