The International Monetary Fund (IMF) has approved the disbursement of $1.2 billion to Egypt following the completion of the fourth review of the country’s $8 billion economic reform programme. This comes after Egypt was granted a waiver on its primary budget surplus target.
Additionally, the IMF’s executive board approved Cairo’s request for an arrangement under the Resilience and Sustainability Facility, granting Egypt access to approximately $1.3 billion in funding. Cairo had initially sought financing under this facility in 2022.
As part of the latest agreement, Egypt’s fiscal commitments were adjusted, with the country’s primary budget surplus—excluding proceeds from asset sales—expected to reach 4% of GDP in the 2025/26 fiscal year, which begins on July 1, 2025. This figure is 0.5% lower than the initial target set under Egypt’s IMF programme.
“The Executive Board approved the authorities’ request to recalibrate the authorities’ medium-term fiscal commitments,” the statement said. “In particular, the primary balance surplus (excluding divestment proceeds) is expected to reach 4% of GDP next fiscal year,” it said. The 2025/26 fiscal year begins on July 1.
Egypt has been struggling with high inflation and foreign currency shortages, exacerbated by a sharp decline in Suez Canal revenues due to regional tensions and reduced natural gas production. However, recent financial reforms under the IMF-backed programme have helped stabilise the economy. In February, Egypt reported that annual urban consumer price inflation had nearly halved, dropping to 12.8% from 24.0% in January.
The IMF’s latest approval, along with the resilience and sustainability facility funding, is expected to help Egypt manage its immediate financial obligations. Analysts and bankers predict that the disbursement will assist the country in rolling over approximately $20 billion in domestic treasury bills set to mature this month, many of which are held by foreign investors.
The fresh IMF funding is seen as a crucial step in stabilising Egypt’s economy, supporting fiscal reforms, and restoring investor confidence amid ongoing economic challenges.
