IMF Details 7 Structural Reform Goals for Egypt

The International Monetary Fund (IMF) identified seven key reform priorities for Egypt as part of its ongoing economic cooperation program aimed at strengthening macroeconomic stability and supporting sustainable growth.

Egypt has already achieved several targets under its IMF-supported program, contributing to improvements in overall economic conditions. These include higher economic growth, a decline in inflation, a narrowing current account deficit, an increase in international reserves, and stronger tax revenue collection.

However, the program has also been associated with a slowdown in public investment spending, reflecting fiscal consolidation efforts.

The IMF has emphasized that Egypt should focus on the following policy areas:

Reducing the state’s direct role in the economy

Expanding opportunities for greater private sector participation

Maintaining exchange rate flexibility

Continuing efforts to lower inflation

Strengthening domestic revenue mobilization

Implementing a comprehensive public debt management strategy

Increasing and protecting social spending

The recommendations are intended to support Egypt’s transition toward a more private sector-driven and resilient economic model while preserving social protection mechanisms.

The reform agenda reflects the broader objectives of the IMF program to enhance fiscal sustainability, improve competitiveness, and promote long-term economic stability.

Egypt is set to receive a new $2.3 billion disbursement from the International Monetary Fund, even as the country prepares to repay approximately $1.381 billion to the Fund over the next five months, according to IMF repayment schedule data.

The repayment obligations are scheduled between February and the end of June 2026, reflecting Egypt’s ongoing debt servicing commitments under its external financing arrangements.

The IMF approved the completion of the fifth and sixth reviews of Egypt’s $8 billion Extended Fund Facility and the first review of the $1.3 billion Resilience and Sustainability Facility on Thursday.

The approval unlocks about $2.3 billion in immediate financing for Cairo, consisting of $2 billion under the Extended Fund Facility and $273 million linked to the sustainability program.

With the latest tranche, Egypt’s cumulative receipts under the two agreements will reach roughly $5.207 billion, equivalent to about 3,885.7 million Special Drawing Rights (SDR), representing nearly 190.7% of the country’s IMF quota, according to Fund data.

The next scheduled review under the lending program is expected in May or June 2026.

The $8 billion Extended Fund Facility agreement is scheduled to expire in mid-December 2026, with Egypt still eligible to receive approximately $4.093 billion if it successfully completes the remaining program reviews.

The IMF said Egypt’s macroeconomic indicators have improved following the implementation of stabilization policies.

Real GDP growth rose to 4.4% during fiscal year 2024/25, while inflation declined sharply to 11.9% in January 2026, supported by tight monetary and fiscal measures.

The current account deficit narrowed to 4.2% of GDP, reflecting stronger remittance inflows and higher tourism revenues, alongside improving market confidence driven by successful external bond issuances and robust foreign direct investment flows.

Foreign reserve buffers also strengthened, with Egypt’s total international reserves increasing from $54.9 billion in December 2024 to approximately $59.2 billion by December 2025, helped by exchange rate flexibility and improved external inflows.

Despite macroeconomic improvements, the IMF noted that progress on structural reforms under the program has been uneven.

The Fund expressed concern over the slow pace of privatization efforts and warned that high public debt levels and large financing requirements continue to constrain fiscal space and medium-term growth prospects.

The IMF urged Egypt to accelerate its transition toward a private sector-led growth model by reducing the state’s direct economic footprint, improving market competition, and advancing divestment from selected state assets.

Policy priorities also include maintaining exchange rate flexibility, continuing disinflation efforts, strengthening domestic revenue mobilization, implementing a comprehensive debt management strategy, and expanding targeted social protection spending.