The International Monetary Fund (IMF) has approved the release of $1.2 billion to Egypt following the fourth review of the country’s $8 billion economic reform programme.
Egypt was granted a relaxation of its primary budget surplus aim, which prompted the approval.
In addition, the IMF’s executive board approved Egypt’s request for a financing arrangement under the Resilience and Sustainability Facility, allowing access to around $1.3 billion, according to a statement from the lender.
Egypt first sought borrowing using this arrangement in 2022.
The revised plan expects Egypt’s primary balance surplus—excluding divestment proceeds—to reach 4% of GDP in the upcoming fiscal year, which begins on July 1, 2025. The primary surplus was 0.5% of GDP lower than the target set in Egypt’s original IMF program.
Egypt has been facing high inflation and foreign currency shortages, exacerbated by a sharp decline in Suez Canal revenues due to regional tensions and declining natural gas production. The country agreed to the IMF program in March 2024.
Egypt said on Monday that annual headline inflation had virtually halved in February, thanks to financial reforms adopted under the IMF deal. Annual urban consumer price inflation declined to 12.8% in February, from 24.0% in January.
Analysts and bankers believe that the IMF’s most recent disbursement and resilience facility financing will let Egypt roll over around $20 billion in local treasury bills that are due to mature this month. Many of these T-bills are owned by overseas investors.
