IMF Review of Egypt's Economic Program Commences
The International Monetary Fund (IMF) has announced the commencement of the fourth review of its lending program with Egypt, starting on Tuesday. This review is particularly significant as it follows recent calls from Egyptian President Abdel Fattah al-Sisi for a reassessment of the loan terms amid escalating regional tensions and economic challenges. Prime Minister Mostafa Madbouly confirmed the review's initiation during a press conference alongside IMF Director Kristalina Georgieva in Cairo, emphasizing the need to address the pressing economic conditions in the country.
The IMF's loan program, originally approved in 2022, has been expanded to $8 billion in response to Egypt's severe economic crisis, characterized by high inflation and a critical shortage of foreign currency. Each of the initial three reviews has facilitated the disbursement of $820 million to Egypt, with the third review concluding in July. Sisi highlighted the necessity of adapting the program to reflect the current economic landscape, which has been adversely affected by international crises that have strained the nation's dollar resources and budget revenues.
Economic Pressures and Reform Challenges
During the meeting, Sisi stressed the government's priority to alleviate the economic burdens on citizens, particularly through measures aimed at combating inflation and rising prices. The Egyptian government has faced significant public discontent due to the austerity measures tied to the IMF program, including subsidy cuts on fuel and electricity and the floating of the Egyptian pound.
Georgieva acknowledged these challenges, stating that the IMF is committed to working closely with the Egyptian government to develop effective reform strategies that prioritize vulnerable populations. The recent hikes in fuel prices, which have seen increases of 11% to 17% this year, further complicate the economic situation for many Egyptians.
The IMF's involvement in Egypt dates back to 2016, with several significant agreements aimed at stabilizing the economy through fiscal reforms and support packages. As the new review begins, both the Egyptian government and the IMF are under pressure to navigate the complex socio-economic landscape, ensuring that reforms do not exacerbate the hardships faced by the population.
