IMF and Egypt reach staff-level agreement on seventh review of reform program

This agreement, if approved by the IMF Executive Board, would unlock approximately $1.6 billion in financing, including $1.5 billion under the Extended Fund Facility and $136 million through the Resilience and Sustainability Facility. The IMF noted Egypt's economic resilience despite regional and global pressures, with real GDP growth reaching 5 percent in the third quarter, bringing the first three quarters of the fiscal year to 5.2 percent. Gross international reserves remained stable, and portfolio inflows supported the exchange rate.

Egypt also exceeded primary balance and tax revenue targets by March 2026, with the primary surplus projected to rise to 5 percent of GDP in FY2026/27. Progress in domestic revenue mobilization is expected to increase the tax-to-GDP ratio by 1.2 percentage points this year. However, the IMF warned of risks from geopolitical tensions and global inflation, with headline urban inflation projected to reach 15.8 percent by the end of the fiscal year.

The fund emphasized the importance of exchange rate flexibility, improved debt management, and accelerated structural reforms, including the State Ownership Policy, to boost private sector-led growth and job creation.