July 13, 2024

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IMF to approve $1.6 bn in financing for Egypt in coming weeks

Egypt is expected to obtain $1.6 billion in funding from the International Monetary Fund (IMF) as the third and final tranche of the $5.2 billion standby loan within the coming weeks.

The IMF team has reached a staff-level agreement with the Egyptian government on the second review of the country’s economic program, but the agreement is still subject to approval by the IMF’s executive board, according to a statement late on Tuesday.

“Egypt’s economy has shown resilience, with the impact of the COVID-19 crisis mitigated by the authorities’ swift, and balanced policy response,” the IMF said in a statement.

The country’s primary balance and international reserves have exceeded the program’s targets and inflation continued to be subdued. “Supported by the authorities’ strong implementation of their policy program, the economy has shown resilience.”

Egypt’s economy is expected to grow by 2.8% in fiscal year (FY) 2020/2021 and 5.2% in FY21/22.

However, there are still risks related to the pandemic and policies are needed to support the recovery in the near term.

“Deepening and broadening structural reforms is critical to solidify the recovery, address post-COVID-19 challenges, strengthen buffers, and ensure higher and more inclusive growth.”