IMF approves release of $820 million for Egypt, calls for more reforms
2024.07.29 19:51
By Kanishka Singh and Aidan Lewis
WASHINGTON (Reuters) – The International Monetary Fund said on Monday it had completed a review allowing Egypt to draw $820 million, saying efforts to restore macroeconomic stability had started to yield results but urging more progress on reining in state-owned enterprises.
The review is the third under Egypt’s latest 46-month IMF loan programme, which was approved in 2022 and expanded to $8 billion this year following an economic crisis marked by high inflation and severe foreign currency shortages.
Egypt says it has shifted to a flexible exchange rate regime, a policy the IMF said on Monday remains “a cornerstone of the authorities’ program.”
“Inflationary pressures are gradually abating, foreign exchange shortages have been eliminated, and fiscal targets (including related to spending by large infrastructure projects) were met,” an IMF statement said.
“While there has been progress on some critical structural reforms, greater efforts are needed to implement the State Ownership Policy (SOP),” it added.
The Fund called on Egypt to accelerate a programme of divestment of state-owned enterprises and carry out reforms to prevent them from using unfair competitive practices.
It also said Egypt, where falling production has contributed to daily power cuts since last year, needed to contain fiscal risks from the energy sector.
“Restoring energy prices to their cost recovery levels, including retail fuel prices by December 2025, is essential to supporting the smooth provision of energy to the population and reducing imbalances in the sector,” the IMF quoted its Deputy Managing Director Antoinette M. Sayeh as saying.
Egypt raised domestic fuel prices by up to 15% ahead of the IMF review, which had been postponed from July 10.
