The IMF has approved a $1.2 billion disbursement to Egypt after the fourth review of its economic reform program, alongside access to an additional $1.3 billion funding through the Resilience and Sustainability Facility. Adjustments to Egypt’s fiscal commitments indicate a targeted 4% primary budget surplus by the 2025/26 fiscal year. These funds will assist in managing immediate financial obligations and bolster investor confidence amidst ongoing economic challenges.
The International Monetary Fund (IMF) has sanctioned the disbursement of $1.2 billion to Egypt, following the completion of the fourth review of the country’s $8 billion economic reform program. This approval comes after Egypt received a waiver regarding its primary budget surplus target.
In addition, the IMF’s executive board has endorsed Cairo’s request for an arrangement under the Resilience and Sustainability Facility, enabling Egypt to access approximately $1.3 billion in funding. This request for financing was initially made by Cairo in 2022.
The recent agreement has led to adjustments in Egypt’s fiscal commitments, stipulating that the primary budget surplus—excluding proceeds from asset sales—is projected to reach 4% of GDP by the 2025/26 fiscal year, commencing July 1, 2025. This is a decrease of 0.5% from the original target set within Egypt’s IMF program.
The IMF stated, “The Executive Board approved the authorities’ request to recalibrate the authorities’ medium-term fiscal commitments,” indicating a targeted primary balance surplus of 4% of GDP for the next fiscal year, beginning on July 1.
Egypt faces challenges with high inflation and foreign currency shortages, worsened by a decline in Suez Canal revenues and reduced natural gas production. Nevertheless, recent reforms supported by the IMF have contributed to economic stabilization, evidenced by a reduction in annual urban consumer inflation to 12.8% in February from 24.0% in January.
The IMF’s latest approval and sustainability facility funding will enable Egypt to meet its immediate financial responsibilities. Analysts anticipate that this disbursement will facilitate the rollover of approximately $20 billion in domestic treasury bills maturing this month, many of which are held by foreign investors.
This new funding is considered instrumental in stabilizing Egypt’s economy, bolstering fiscal reforms, and restoring investor confidence amidst ongoing economic difficulties.
In conclusion, the IMF’s approval of $1.2 billion in disbursement to Egypt marks a significant step in supporting the country’s economic reforms. The adjustments in fiscal commitments and access to additional funding under the Resilience and Sustainability Facility will aid Egypt in addressing immediate financial challenges while striving to stabilize its economy amid high inflation and currency shortages. Overall, this support is vital for restoring investor confidence and ensuring fiscal sustainability moving forward.
Original Source: www.arise.tv
