IMF Board Completes Egypt’s Seventh Review, Unlocking About $1.8 Billion
The Executive Board of the International Monetary Fund completed Egypt’s seventh review under the Extended Fund Facility and the second review under the Resilience and Sustainability Facility, allowing the authorities to draw the equivalent of about $1.8 billion.
The sign-off gives immediate access to SDR 1.11 billion (about $1.5 billion) under the 48-month EFF and a further SDR 200 million (about $272 million) under the RSF. That takes total purchases and disbursements under the two arrangements to about $7.3 billion. The IMF mission chief to Egypt said the funds are due to arrive on Monday, and that fiscal performance was strong with all seventh-review targets met.
Growth held up through the shock
Real GDP growth reached 5 percent in the third quarter, bringing growth for the first three quarters of the fiscal year to 5.2 percent. Full-year growth is projected at about 4.6 percent. The lagged effects of the regional disruption, including weaker investment, higher input costs and persistent uncertainty, are projected to moderate growth to 4.4 percent in FY2026/27.
Inflation off its March peak
Headline inflation declined steadily until March 2026, when it rose to 15.2 percent, about 1.4 percentage points above staff expectations, mainly on exchange rate depreciation and higher energy prices. It eased to 14.3 percent in June, while core inflation rose to 14.3 percent.
External account cushioned by inflows
The current account came under pressure in March following higher oil and gas prices, but record remittance inflows, robust tourism receipts and a gradual recovery in Suez Canal revenues helped contain the impact, with the current account deficit estimated at 4.5 percent of GDP in FY2025/26.
What the Fund credited, and what it flagged
The Fund said the economy has remained resilient to regional spillovers, supported by a timely and decisive policy response that included exchange rate flexibility, fuel price adjustments and measures to contain budget spending. Prime Minister Moustafa Madbouly welcomed the decision and noted that the government exceeded its targets for the primary surplus and tax revenues while continuing to reduce financing needs.
Deputy Managing Director and acting chair Nigel Clarke said the banking sector remains sound and that stronger contingency planning would improve resilience to downside risks, adding that completed governance diagnostics of state-owned banks should be followed by timely corrective action. Progress on structural reform has been uneven. The Fund said appropriately tight monetary policy, continued fiscal discipline and decisive implementation of the state ownership policy and divestment agenda will be essential to preserve stability.
Outlook
Egypt agreed a $3 billion facility with the Fund in December 2022, expanded to $8 billion in March 2024. This is the penultimate review of a programme that runs to December 2026. The tranche reinforces reserve cover and near-term external financing visibility, and the variables to watch into the final review are the pace of divestment, the summer inflation prints, and the trajectory of energy import costs.
Sources: International Monetary Fund, Egyptian Cabinet / State Information Service, Bloomberg, CNBC Arabia.
