IMF Releases $1.8 Billion to Egypt Amid Structural Reform Concerns

Egypt is set to receive $1.5 billion under its 48-month loan agreement and an additional $272 million through the Resilience and Sustainability Facility, with funds expected by August 3. IMF Mission Chief Amine Mati noted that the latter portion was increased after Cairo surpassed specific climate-related reform benchmarks. Despite these gains, the IMF remains cautious regarding Egypt's public debt levels and vulnerability to global oil price fluctuations. Mati warned that a $10 rise in international oil costs would widen the national deficit by roughly 0.3% of GDP, underscoring the necessity of the government’s plan to align domestic fuel prices with global market rates.

Structural reforms remain a significant point of friction. The IMF highlighted that efforts to open the economy to private investment have stalled, falling behind the anticipated timeline. This tension is further complicated by President Abdel Fattah al-Sisi’s recent ratification of a law expanding the powers of the Future of Egypt Authority, a state-linked entity. The IMF is currently evaluating whether this expansion conflicts with the state ownership policy intended to reduce government interference. While Prime Minister Mostafa Madbouly has indicated the government intends to finalize a post-IMF national economic program by September, Mati confirmed that discussions regarding a successor arrangement to the current $8 billion agreement have not yet commenced.