The International Monetary Fund announced the completion of a review that will allow Egypt to withdraw $820 million, saying efforts to restore macroeconomic stability were beginning to bear fruit, but urged more progress in curbing the control of state-owned companies.
This is the third review under the fund’s latest 46-month loan programme for Egypt, which was approved in 2022 and increased to $8 billion this year after an economic crisis that saw high inflation and a severe shortage of foreign exchange.
Flexible exchange rate
Egypt says it has moved to a flexible exchange rate regime, a policy the IMF said on Monday remains “the foundation of the authorities’ program.”
“Inflationary pressures are gradually easing, the foreign exchange deficit has been eliminated, and fiscal targets have been achieved,” including those related to spending through large infrastructure projects, the fund statement said.
“While there has been progress on some critical structural reforms, greater efforts are needed to implement the state ownership policy,” he added.
The Fund called on Egypt to accelerate the divestment program from state-owned companies and implement reforms to prevent them from using unfair competitive practices.
Financial risks
The fund said that Egypt, where declining natural gas production has contributed to daily power outages since last year, needs to contain financial risks associated with the energy sector.
“Restoring energy prices to cost-recovery levels – including retail fuel prices – by December 2025 is essential to support smooth energy supply to the population and reduce disruptions in the sector,” the fund quoted Antoinette Sayeh, Deputy Managing Director of the International Monetary Fund, as saying.
Egypt raised domestic fuel prices by up to 15% ahead of an IMF review, which had been postponed since July 10.
