• The IMF has approved the disbursement of a USD 1.2 billion loan tranche to Egypt, expected within days.
• The IMF acknowledges Egypt’s reform progress, citing lower inflation, rising foreign reserves, and efforts to manage debt despite economic challenges.
• Egypt remains committed to lifting fuel subsidies by December 2025, with economic conditions currently favoring the transition.

IMF Loan

What is happening? The Executive Director of the International Monetary Fund (IMF)  Dr. Mohamed Maait, stated that Egypt will receive the fourth tranche of its loan. The loan is expected to be received within days following the approval of the IMF Executive Board and amounts to USD 1.2 billion.  

Earlier, Egyptian Deputy Finance Minister Ahmed Kouchouk announced that the IMF had approved the disbursement of Egypt’s fourth loan tranche under the USD 8 billion extended support program. By the end of 2024, IMF announced an agreement that allows the disbursement of USD 1.2 billion under the program as part of the total USD 8 billion loan agreement signed by Egypt in March 2024, spanning 46 months.

Egypt’s Economic Reforms  In an interview with Alarabiya Business, Dr Maait explained that the IMF Executive Board acknowledges Egypt’s progress with economic reforms since March 2024. He highlights reduced inflation and growing foreign reserves amounting to USD 47.4 billion. Additionally, it acknowledges the Ministry of Finance’s efforts to achieve a primary surplus and reduce government debt. 

At the same time, Dr Maait explains that the IMF recognizes Egypt’s economic hurdles, including regional and geopolitical challenges and a drop in Suez Canal revenues. Given these challenges, the IMF showed flexibility in responding to Egypt’s request to adjust the timeline for certain reforms. Dr. Maait emphasized that the IMF remains supportive of Egypt’s reform path, with upcoming program reviews to ensure progress.

Fuel Subsidies

Fuel Subsidies When asked about postponing fuel subsidy cuts, Dr. Maait reaffirmed that Egypt remains committed to lifting fuel subsidies by December 2025.

He noted that global oil price trends are currently in Egypt’s favor. For instance, inflation has eased, and exchange rates have remained flexible since March 2024. Thus, he states that given these positive developments, the Egyptian authorities remain committed to the December 2025 deadline.

What’s next? Regarding future program reviews, Maait stated that the program is well-defined, and the fifth review will commence in the coming months.