The International Monetary Fund announced in a Tuesday statement that Egypt passed the fifth and sixth reviews of its US$8 billion loan program. This comes after the fifth review stalled for months due to slow privatization efforts. The fund praised Egypt's economic performance while calling for accelerated reforms.
The International Monetary Fund announced that Egypt passed the fifth and sixth reviews of its US$8 billion loan program, paving the way for a nearly $2.6 billion disbursement, bringing the total received to $3.2 billion since the 2022 agreement. An additional $2.2 billion remains in the program, set to end in autumn 2026.
The fifth review had stalled for months following IMF spokesperson Julie Kozack's early July comments urging a decrease in the government's economic role and acceleration of the asset sales program. The fourth review criticized the slow pace of the state's withdrawal, including from military-affiliated entities. The government requested merging the fifth and sixth reviews to secure dollar inflows and expand private sector space, as explained by Fakhry al-Fekky, head of the Planning and Budgeting Committee in the outgoing House of Representatives.
In these reviews, the IMF softened its privatization critiques, emphasizing the need to accelerate reforms giving the private sector space to flourish. It recommended significant progress in divestments, leveling the playing field, and avoiding new or expanded state-owned enterprises. Egypt also passed the first review under the $1.3 billion Resilience and Sustainability Facility agreed in March to address climate and pandemic threats.
The fund praised the stability of macroeconomic indicators, slowing inflation, and robust growth of 4.4 percent in fiscal year 2024/25, up from 2.4 percent, driven by non-oil manufacturing, transportation, finance, and tourism. Growth reached 5.3 percent year-on-year in the first quarter of 2025/26. The balance of payments improved markedly, with a narrowed current account deficit, strong expatriate remittances, tourism revenues, and non-oil export growth. Non-resident inflows into local-currency debt rose to around $30 billion, and foreign reserves hit $56.9 billion.
A tight monetary policy contributed to inflation slowdown, with cautious easing underway. Fiscal discipline bolstered strong tax revenues, but debt reduction is needed while prioritizing social spending. The Cairo delegation discussed over-reliance on short-term borrowing, or hot money, reaching $42-50 billion. The government targets a 4.8 percent primary surplus of GDP this fiscal year and 5 percent next, with January 2026 tax reforms expected to boost collections by 1 percent of GDP. Efforts to facilitate trade and streamline taxes were welcomed, as were fuel cost recoveries and commitments to expand social programs like Takaful and Karama. Egypt implemented two climate mitigation measures under the RSF.