The International Monetary Fund has approved the release of about US$2.3 billion to Egypt after completing key reviews of the country’s economic reform programme, citing improving macroeconomic stability but warning that deeper structural reforms remain critical for sustained growth.
The IMF Executive Board completed the fifth and sixth reviews of Egypt’s Extended Fund Facility (EFF) arrangement alongside the first review under the Resilience and Sustainability Facility (RSF), enabling Cairo to immediately access roughly US$2 billion under the EFF and an additional US$273 million linked to climate-focused reforms.
The latest disbursement brings Egypt’s total financing under both programmes to more than US$5.2 billion as authorities continue efforts to stabilize an economy that has faced high inflation, currency pressures and rising debt in recent years.
According to the IMF, Egypt’s economic conditions have improved significantly as tight monetary and fiscal policies, combined with exchange rate flexibility, begin to yield results.
Economic growth rebounded to 4.4 percent in the 2024/25 fiscal year, while inflation slowed sharply to 11.9 percent in January 2026 following aggressive policy tightening by authorities. The country’s external position also strengthened, supported by strong remittance inflows and a recovery in tourism revenues.
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Foreign investor confidence has gradually returned, reflected in renewed foreign direct investment inflows, successful international debt issuances and record purchases of domestic debt by non-resident investors.
Egypt’s gross international reserves rose to about US$59.2 billion by December 2025, up from US$54.9 billion a year earlier, providing a stronger buffer against external shocks.
Despite these gains, the IMF cautioned that progress on structural reforms has been uneven, particularly efforts aimed at reducing the state’s large role in the economy.
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“Further progress on deeper reforms, particularly in divestment in non-strategic sectors and debt management, is needed,” IMF Deputy Managing Director Nigel Clarke said following the board meeting.
Reducing the state’s economic footprint is seen as central to unlocking private sector investment and transitioning Egypt toward a more sustainable, private sector-led growth model.
Fiscal performance has improved through higher tax revenues and reduced public investment spending, although Egypt missed a key programme target linked to proceeds from planned asset sales.
High public debt levels and significant financing needs continue to limit fiscal space and pose medium-term risks, the Fund said.
Under the RSF programme, Egypt has made progress on climate-related reforms designed to strengthen environmental risk management and accelerate decarbonization. Authorities have published an implementation schedule for renewable energy targets and introduced new banking directives requiring financial institutions to monitor exposure to climate transition risks.
The IMF stressed that maintaining exchange rate flexibility remains essential to preventing renewed external imbalances, urging authorities to limit foreign exchange interventions to managing market disorder.
Policy priorities going forward include broadening the tax base, improving tax compliance, strengthening debt management and enhancing transparency in fiscal operations.
The Fund also called for stronger governance reforms within state-owned enterprises and banks to improve competition and financial sector resilience.
While risks remain elevated due to regional geopolitical tensions and tightening global financial conditions, the IMF noted potential upside factors, including a recovery in Suez Canal activity, increased hydrocarbon production and Gulf-backed investment projects that could boost foreign investment inflows.
Egypt’s reform programme, approved in December 2022 and now extended through December 2026, aims to restore macroeconomic stability while laying the foundation for inclusive and export-led growth.
The IMF said sustained reform implementation — particularly faster divestment and continued macroeconomic discipline — would be essential to securing durable economic recovery and improving living standards for Egyptians.
