The Executive Board of the International Monetary Fund (IMF) has completed the combined fifth and sixth reviews of Egypt’s economic reform program supported by the Extended Fund Facility (EFF) arrangement and the first review under the Resilience and Sustainability Facility (RSF) arrangement, according a statement by the IMF.
This enables the authorities to immediately draw about $2 billion under the EFF and $ 273 million under the RSF, bringing Egypt’s total purchases under the EFF and RSF to about $ 5.2 billion or 190.7 percent of quota.
Egypt’s 46-month EFF arrangement, that was approved on December 16, 2022, has been extended through December 15, 2026.
Egypt’s macroeconomic conditions have improved as stabilization policies took hold. A broad-based economic recovery has lifted real GDP growth to 4.4 percent in FY2024/25 while inflation declined markedly to 11.9 percent in January 2026, supported by tight monetary and fiscal policies.
The current account deficit narrowed further to 4.2 percent of GDP, reflecting strong remittances and tourism receipts, while market confidence continued to improve, as evidenced by successful external issuances, foreign direct investment inflows, and record nonresident inflows into domestic debt markets.
The improved external position, together with exchange rate flexibility, has helped increase gross reserves from $54.9 billion in December 2024 to about $ 59.2 billion as of December 2025.
Fiscal performance also improved, supported by lower public investment and higher tax revenue, although the primary balance fell short of the program target in the absence of the programmed divestment proceeds.
Implementation under the RSF – which supports reforms to accelerate decarbonization, strengthen environmental risk management, and enhance climate resilience – is progressing well.
The authorities have completed two key reform measures, including publication of an implementation schedule for renewable energy targets and issuance of a directive requiring banks to monitor and report exposure to climate transition risks.
Policy priorities include maintaining exchange rate flexibility, completing disinflation, strengthening domestic revenue mobilization, and implementing a comprehensive debt management strategy while enhancing social spending and measures to protect the most vulnerable.
At the same time, downside risks remain significant, particularly those associated with heightened regional geopolitical tensions and tighter global financial conditions. On the upside, a faster pickup in the Suez Canal activity or rebound in hydrocarbon production could support growth and strengthen the fiscal and external positions. Gulf-backed mega projects announced in recent years pose upside risks to FDI projections.
