Published on 6/30/2026
The International Monetary Fund reached a staff-level agreement with Egypt on reviewing the Extended Fund Facility and the Resilience and Sustainability Facility programmes, in a move that could allow Cairo to obtain new financing worth $1.64 billion, after approval by the Fund’s Executive Board.
The Fund explained that the agreement includes disbursing about $1.5 billion through the Extended Fund Facility Program, In addition to about $136 million through the Resilience and Sustainability Facility allocated to support environmental transformation and adaptation to climate change, bringing the total funding obtained by Egypt under the two programs to about $7.2 billion.
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The agreement comes within the framework of an $8 billion financing program approved by the Fund in March 2024, after expanding the original $3 billion program, concluded in December 2022, to help Egypt confront the crisis of foreign exchange shortages and high inflation.
The IMF noted that “the impact of the war in the Middle East on the Egyptian economy remained limited,” attributing this to “decisive and timely” measures taken by the government, which included adjusting fuel and electricity prices, rationalizing energy consumption in the government sector, and rearranging spending priorities.
The Fund added that the Egyptian economy is still facing challenges related to regional tensions, in light of its dependence on foreign direct investment flows and gas imports, but it indicated continued improvement in economic activity.
Economic growth despite pressures
The Fund explained that the real gross domestic product grew by 5% during the third quarter of the fiscal year, bringing the average growth during the first 9 months to 5.2%.
In contrast, urban inflation remained high at 14.6% during May, with expectations of it rising to 15.8% by the end of the fiscal year, a higher level than pre-war estimates.
The Fund stressed the necessity of continuing the tight monetary policy to contain inflationary pressures, and keeping the exchange rate flexibility at the forefront of tools for confronting external shocks, including the repercussions of geopolitical tensions.
He pointed out that tax revenues and the primary surplus exceeded the budget targets until the end of March, expecting the primary surplus to rise to 5% of GDP in the 2026-2027 fiscal year, compared to 4.8% in the current fiscal year.
He also highlighted reforms aimed at expanding the tax base and reducing the state’s role in the economy, stressing that implementing the state ownership policy, including accelerating the government asset sale programme, will be crucial to supporting private sector-led growth.
This month, the Egyptian Council of Ministers announced the temporary listing of 4 state-owned companies on the stock exchange as part of the government offering program.
Central Bank of Egypt data showed foreign exchange reserves rising to $53.134 billion at the end of last May, compared to $48.526 billion in the same month of 2023.
What does the Extended Fund Facility mean?
The IMF’s Resilience and Sustainability Facility (RSF) provides affordable, long-term financing to support countries undertaking reforms to reduce risks surrounding the stability of their balance of payments, including risks associated with climate change and pandemic preparedness.
The Extended Fund Facility (EFF) provides financial assistance to countries with serious medium-term balance of payments problems due to structural weaknesses that require time to remedy.
To help countries implement medium-term structural reforms, the Extended Fund Facility provides support from the Fund through longer-term programs and a longer repayment period.
