IMF conducting study on impact of reforms on Egyptians before 4th review

Cairo – October 28, 2024: The International Monetary Fund (IMF) and Egypt are conducting a comprehensive study to assess the impact of structural economic reforms to ensure the protection of the most vulnerable segments of society, as confirmed by the IMF's regional director, Jihad Azour in a recent interview.

During the upcoming visit of IMF Managing Director Kristalina Georgieva to Cairo, expected to happen in early November, discussions will focus on the readiness of Egypt's social protection programs.

New data is expected to reveal the effects of economic reforms on household spending following two years of currency devaluation and rising prices.

This will enable the government and the IMF to enhance the effectiveness of social programs, Azour emphasized that the IMF team will evaluate the situation in Egypt during the next program review.

This visit comes at a time when the Egyptian government is seeking to review the targets and timelines associated with its $8 billion loan agreement with the IMF, amid ongoing regional turmoil.

With a population exceeding 106 million, Egypt signed an agreement in March to increase the value of its loan from the IMF as part of a comprehensive rescue plan for its economy.

Since then, the government has implemented significant cuts to fuel, bread, and electricity subsidies, increasing the pressure on consumers.

Last week, President President Abdel Fattah el-Sisi stated that the implementation of the agreement with the IMF is taking place under “very difficult regional and economic conditions,” urging the government to review the agreement if financial pressures become unbearable for citizens.

The IMF recently expressed its willingness to make adjustments to the loan program with Egypt, stressing the importance of continuing currency reforms after the authorities allowed the Egyptian pound to depreciate by about 40% in March. Azour reiterated that high levels of uncertainty in the region negatively impact the attraction of foreign direct investment.

Azour also noted that reducing borrowing costs for debt-laden countries could provide Egypt with approximately $800 million by 2030.