Egypt, IMF Hold New Discussions to Alleviate Citizens’ Financial Burdens

Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
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Egypt, IMF Hold New Discussions to Alleviate Citizens’ Financial Burdens

Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)
Sisi and IMF Managing Director Kristalina Georgieva. (Reuters file photo)

Egypt and the International Monetary Fund (IMF) have agreed to review their joint credit facilitation program to ensure that no additional burdens are placed on citizens.

Egyptian Prime Minister Mostafa Madbouly reiterated the government’s commitment to “maintaining a flexible exchange rate in coordination with the central bank to safeguard the progress achieved in this area.” He expressed hope that the meetings with the IMF delegation in the coming days would “conclude the fourth review of the economic reform program.”

Following a meeting on Sunday between President Abdel Fattah al-Sisi and IMF Managing Director Kristalina Georgieva in Cairo, the Egyptian Presidency announced that Georgieva expressed her “full understanding of the significant challenges Egypt faces amid regional and global developments.”

In March, Egypt signed an $8 billion extended financial support package with the IMF, which requires reducing subsidies on fuel, electricity, and essential goods and allowing the Egyptian pound to float.

In late October, Sisi warned that his government might need to reassess its program with the IMF if international institutions do not account for the extraordinary regional challenges the country is facing. He cited a nearly 60% drop in Suez Canal revenue due to security tensions in the Red Sea as an example.

During the meeting with Georgieva, Sisi expressed Egypt’s commitment to continuing its cooperation with the IMF, building on progress to boost economic stability and reduce inflation. However, he stressed the need to acknowledge recent challenges Egypt has faced due to regional and international crises, which have impacted foreign currency reserves and budget revenues.

Sisi reiterated that the government’s primary focus is on alleviating pressures on citizens, particularly by controlling inflation and curbing rising prices, while also continuing efforts to attract investments and empower the private sector to drive employment and growth.

Georgieva, in turn, commended Egypt’s recent efforts and the reform program being “carefully implemented with a focus on the most vulnerable.” She highlighted the progress in macroeconomic indicators despite unprecedented current challenges, noting that this has been reflected in positive assessments from international credit rating agencies, improved credit ratings, and increased investments.

She expressed her “full understanding of the significant challenges Egypt faces amid regional and global developments” and emphasized the IMF’s commitment to working with the Egyptian government to identify optimal reform paths.



Egypt Approves $91 Billion Budget for 2025/26

 The sun rises in Cairo, Egypt March 25, 2025. (Reuters)
The sun rises in Cairo, Egypt March 25, 2025. (Reuters)
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Egypt Approves $91 Billion Budget for 2025/26

 The sun rises in Cairo, Egypt March 25, 2025. (Reuters)
The sun rises in Cairo, Egypt March 25, 2025. (Reuters)

Egypt's cabinet approved a 4.6 trillion Egyptian pound ($91 billion) draft state budget for the financial year that will begin in July, a government statement said on Wednesday, as it continues to tighten its finances under an IMF program.

Expenditures will rise by 18% and revenue by 19% over the current 2024/25 budget. Revenue is expected to hit 3.1 trillion pounds, working out to a deficit of about 1.5 trillion pounds ($30 billion).

The increased expenditure partly reflects elevated headline inflation, which was running at an annual 12.8% in February.

Financial reforms under an $8 billion financial reform program signed in March 2024 with the International Monetary Fund have helped Egypt bring inflation down from a peak of 38% in September 2023.

The IMF this month approved the disbursement of $1.2 billion to Egypt after its fourth review of the program.

The new budget targets a primary surplus of 795 billion pounds, equal to 4% of GDP, up from the 3.5% primary surplus originally targeted in the 2024/25 budget.

The IMF granted the government a waiver in the fourth review after the surplus came in 0.5% of GDP lower than Egypt's earlier commitment.

In its third review in June, the IMF praised Egypt for its "strict control of spending".

The new budget also lowers public debt to 82.9% of GDP from an expected 92% in 2024/25, the cabinet statement said.

The cabinet said 732.6 billion pounds in spending in the new budget would be allocated for subsidies, grants and social benefits, an increase of 15.2%.

The budget increases commodities and bread subsidies by 20% to 160 billion pounds. It will also include 75 billion pounds to subsidize petroleum products, 75 billion pounds to subsidize electricity and 3.5 billion pounds to subsidize natural gas deliveries to households, the statement added.