Cairo - Mubasher: The International Monetary Fund (IMF) staff and the Egyptian authorities have reached a staff-level agreement on comprehensive economic policies and reforms to be supported by a 46-month extended fund facility (EFF) arrangement of $3 billion.
The new EFF aims to protect macroeconomic stability and debt sustainability, improve Egypt’s resilience to external shocks, strengthen the social safety net, and step-up reforms that underpin higher private-sector-led growth and job creation, said Egypt’s Mission Chief, Ivanna Vladkova Hollar, in a statement on Thursday.
The IMF arrangement is forecast to catalyse a large multi-year financing package, including about $5 billion in fiscal year (FY) 2022/2023.
Moreover, Egyptian authorities have requested financing under the newly created Resilience and Sustainability Facility (RSF), which could unlock up to an additional $1 billion for Egypt.
Hollar stated: “The rapidly changing global environment and spillovers related to the war in Ukraine are posing significant challenges for countries around the world, including Egypt. The IMF team welcomes the authorities’ recent actions to expand targeted social protection, implement a durable flexible exchange rate regime, and phase out the mandatory use of letters of credits for import finance, as well as their steadfast commitment to tackle needed macroeconomic adjustments and carry out an ambitious structural reform agenda amidst a challenging global backdrop.”
“Egypt’s international and regional partners will play a critical role in facilitating the implementation of the authorities’ policies and reforms. Additional financing of about $5 billion is expected from multilateral and regional partners for FY2022/23, which will help strengthen Egypt’s external position,” added Hollar.
Earlier this month, Egypt's Minister of Planning, Hala El-said, participated in the dialogue held by the Atlantic Council on the opportunities and challenges facing the Egyptian economy until 2023 and afterward.
The dialogue came as part of a series of dialogues on the annual meetings of the IMF and the World Bank (WB), gathering economy and finance ministers from all over the world to discuss their economic expectations for 2023.
During the dialogue, the Egyptian minister revealed that the Egyptian economy grew faster than expected by 6.60% in FY21/22, compared to 3.30% in the previous year, noting that the country’s gross domestic product (GDP) exceeded the IMF’s expectation and grew by 5.90%, the highest rate since 2008.
During FY22/23, the Egyptian government forecasts the GDP to grow by 5.50%. This comes after the state has lowered its expectations by 0.2% given the latest global developments.
