Egypt, IMF Reach Staff Level Agreement For $1.2Bn
Date
12/25/2024 11:09:28 PM
(MENAFN- Daily News Egypt) Egypt's Prime Minister Mostafa Madbouly chaired the weekly government meeting on Wednesday in the New Administrative Capital, where key economic updates and initiatives were discussed. Among the highlights, the Prime Minister announced that Egypt has reached staff-level agreement on its fourth review with the International Monetary Fund (IMF) for a $1.2bn financial support under the Extended Fund Facility (EFF) arrangement, subject to approval by the IMF executive board.
Madbouly noted that Ivanna Vladkova Hollar, head of the IMF mission to Egypt, confirmed an agreement at the expert level between Egyptian officials and the IMF. Hollar emphasized that Egypt had continued to implement critical policies to ensure macroeconomic stability, even amid regional tensions and a significant drop in Suez Canal revenues .
In a related statement, the IMF acknowledged the challenging domestic and external economic environment, noting Egypt's request for a recalibration of its medium-term fiscal commitments. The IMF's revised projections include a primary balance surplus of 4% of GDP in FY 2025/26, slightly below earlier program targets, with the surplus expected to reach 5% by FY 2026/27. This recalibration is intended to balance fiscal consolidation with increasing social support programs for vulnerable groups and the middle class, while maintaining debt sustainability.
The IMF also outlined Egypt's future reform priorities, including boosting domestic revenues, improving the business environment, accelerating divestment, and enhancing governance and transparency. The Central Bank of Egypt (CBE) reaffirmed its commitment to a flexible exchange rate regime, tight monetary policy to reduce inflation, and modernizing its operations to move towards inflation targeting. Strengthening the financial sector's resilience and enhancing governance in the banking sector are also key priorities.
In addition to the IMF update, Prime Minister Madbouly highlighted Egypt's substantial debt repayments, with the country having repaid $7bn in November and December. This brings the total debt repayment in 2024 to $38.7bn. Despite the significant financial strain, Madbouly emphasized Egypt's commitment to meeting its obligations, stressing that the country has never defaulted on any payments. He noted that the repayment amount in 2025 would be lower than in 2024.
Madbouly also addressed ongoing efforts to improve governance, control investment expenditure, and create greater opportunities for the private sector. These efforts aim to enhance the financial performance of the state's general budget and support economic growth. Furthermore, he assured that authorities continue to ensure sufficient reserves of essential goods to meet both production and consumption needs, helping to stabilize prices in line with President Abdel Fattah El-Sisi's directives.
MENAFN25122024000153011029ID1109030398
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.