The IMF said its team continues to work with the Egyptian authorities on the policy and financing packages needed to complete the program supported by the Extended Fund Facility that it agreed to provide to Egypt in late 2022.
Jihad Azour, Director of the Middle East and Central Asia Department at the IMF, confirmed during a press conference today, that these goals are to achieve exchange rate flexibility, address the high inflation rate, which currently stands at 33%, protect the economy from external shocks, empower the private sector, and expand social protection programs to protect low-income individuals.
He added that because of Egypt's geographical location and its proximity to Palestine, it was affected by the current events in Gaza, which led the Fund to reduce its expectations regarding the gross product growth rate for the current fiscal year by 0.6%, compared to its previous expectations issued last October.
In December of last year, the Executive Board of the International Monetary Fund agreed to conclude a 46-month agreement with Egypt within the framework of the “Extended Fund Facility” worth 2,350.17 million Special Drawing Rights (equivalent to 115.4% of the Fund’s membership quota, or about $3 billions).
At the time, the Fund announced the disbursement of an immediate payment of 261.13 million Special Drawing Rights (equivalent to $347 million) to help meet the needs of the balance of payments and support the budget.
The International Monetary Fund lowered its expectations for the growth rate of the Egyptian economy during the current and next fiscal years from those issued last October, in the World Economic Outlook report, issued yesterday.
The IMF expected that Egypt's GDP growth rate would decline by 0.6% from that expected last October, to reach 3% in the current fiscal year 2023/2024, compared to the 3.8% it estimated for the last fiscal year.
The Fund lowered its growth rate forecast for the next fiscal year, to record 4.7%, a 0.3% reduction from those issued last October.
The IMF said, in the Regional Economic Outlook Report for the Middle East and Central Asia, which it revealed a short while ago, that it is committed to supporting the region, and is ready to advise on policies and provide technical assistance and financing to the countries of the Middle East and North Africa. To help prevent shocks and facilitate any necessary corrections.
It stressed that from early 2020 until mid-January 2024, the financing provided by the Fund to the Middle East and North Africa region amounted to more than $27 billion.