IMF-approved bailout injects life into Egypt’s ailing economy
The International Monetary Fund (IMF) has announced the disbursement of $820 million to the Egyptian government as part of its commitment to shoring up the nation’s stumbling economy.
The disbursement, validated by the IMF’s Executive Board, comes at a time Egypt is grappling with mounting economic challenges.
The $820 million payment is part of a larger $3 billion aid program initiated in 2022, with the Board recently approving a $5 billion extension, bringing the total lending to Egypt to $8 billion.
IMF Managing Director, Kristalina Georgieva, in a statement, commended the Egyptian government for its efforts in achieving all the objectives set out in the first two stages of the aid program.
She noted that the authorities have significantly strengthened the reform package by putting in place measures toward correcting macroeconomic imbalances, including unification of the exchange rate and tightening of monetary and fiscal policies.
Egypt’s economy has been marred by inflationary pressures and currency depreciation, caused by external factors including disruptions to key revenue streams such as tourism and trade.
Recall that earlier this month, Egypt’s central bank raised rates by six percentage points to 27.75 percent to combat inflation and bring the official exchange rate closer to the black market rate, causing the Egyptian pound to plunge 40 percent in one day, following a 50 percent fall over the last few months.
The IMF however, expressed optimism of a potential turnaround for Egypt’s economy for the coming fiscal year, forecasting that economic growth will rise by 4.4 percent, compared with 3 percent for the current fiscal year ending June 30.