Last Friday, the Central Bank of Egypt received a first tranche worth one billion euros ($1.03 billion) of a European Union financing package amounting to 7.4 billion euros ($8.06 billion), according to what Prime Minister Mostafa Madbouly announced yesterday, Wednesday.
Madbouly said in a press conference yesterday, “Within the framework of the partnership program with the European Union, the Union actually transferred the first tranche of the support program to Egypt, which is one billion euros. And it actually arrived last Friday at the Central Bank.”
In March of last year, the European Union announced a financing package for Egypt as part of an agreement to raise the level of relations between the two sides to a “strategic partnership.”
The agreement aims to enhance cooperation between the Union and Egypt in areas including renewable energy, trade and security, while providing grants, loans and other forms of financing over a period of 3 years to support the faltering Egyptian economy.
A document published by the European Union at the time showed that the proposed funding included:
- Soft loans amounting to 5 billion euros ($5.18 billion).
- Investments worth 1.8 billion euros ($1.86 billion).
- The Union will provide grants amounting to 600 million euros ($621 million), including 200 million ($207 million) to address immigration problems.
IMF segment
Egypt is awaiting the disbursement of $1.2 billion from the International Monetary Fund after reaching an agreement at the expert level regarding the fourth review under the Extended Fund Facility Agreement with Egypt, with a total value of $8 billion.
Staff-level agreement on the fourth review still needs approval from the IMF Executive Board.
The IMF stated that the Egyptian government agreed to increase the tax-to-revenue ratio by 2% of GDP over the next two years, with a focus on eliminating exemptions rather than increasing taxes.
Quarterly growth
Meanwhile, the Ministry of Planning, Economic Development and International Cooperation announced, the day before yesterday, that the gross domestic product grew by 3.5% in the first quarter of the fiscal year 2024-2025, compared to 2.7% in the same quarter of the previous year.
The fiscal year in Egypt begins on the first of July.
In a statement, the Ministry attributed this growth to the reform policies taken by the government with the aim of restoring macroeconomic stability and enhancing the governance of public investments, as well as to the noticeable improvement in some major economic activities, especially the manufacturing industry, despite the continued decline in Suez Canal activity against the backdrop of geopolitical tensions in the region. .
The Ministry indicated a continued decline in Suez Canal activity during the first quarter of the fiscal year, as it decreased by 68.4%, which led to a decline in the number of ships passing through the canal and thus a decrease in its revenues.
