The International Monetary Fund (IMF) announced in a review that it has eased several conditions in its eight billion dollar financial support package for Egypt, which include allowing Cairo more time to carry out the necessary reforms.
Egypt and the fund previously agreed on a package in 2022, but the fund has repeatedly delayed disbursements on the grounds that Egypt has not met its conditions – such as committing to flexible exchange rate.
This new review involves easing some of the fund’s criteria, and is part of the two reviews the IMF conducts per year before disbursing funds.
Though approved back in July, the latest review was only published on Monday evening – it marks the third such review for Egypt and follows after the package was increased back in March.
“The fund agreed to postpone the publication of annual audits of the financial accounts issued by the Central Auditing Organization until the end of November instead of the original date of the end of March, pending amendments to the law governing the organization,” according to a Reuters report.
The IMF said Egypt could forgo quarterly fuel price hikes in exchange for a firm commitment to raise prices to “cost-recovery levels” by the end of 2025.
The review was originally slated for approval on July 11, but after Egypt raised fuel prices by up to 15 percent it was delayed to July 29.
“Restoring energy prices to cost-recovery levels, including retail fuel prices, by December 2025 is essential to support the smooth supply of energy to the population and reduce sector imbalances,” the review said.
In its statement, the fund said it has approved the third tranche in late July, and that “inflationary pressures are gradually easing, the foreign exchange deficit has been eliminated, and fiscal targets have been achieved,” including those related to spending through large infrastructure projects.
“While we have made progress on some critical structural reforms, we find that greater efforts are needed to implement the state ownership policy,” it added.
The IMF called on Egypt to accelerate the divestment program from state-owned companies and implement reforms.
