The International Monetary Fund (IMF) announced on Tuesday a pivotal step in its economic cooperation with Cairo, reaching a staff-level agreement with Egyptian authorities on the fifth and sixth reviews of the Extended Fund Facility (EFF) program. This agreement paves the way for Egypt to receive a disbursement of approximately $2.5 billion, in addition to another $1.3 billion in financing through the Resilience and Sustainability Facility, pending final approval by the IMF Executive Board.
Integrating reviews and timing implications
The decision to combine the fifth and sixth reviews was a strategic move to give the Egyptian government sufficient time to achieve the stringent economic targets outlined in the program. This development complements the landmark agreement signed in March 2024, which increased the total loan amount to $8 billion in response to the geopolitical and economic challenges facing Egypt, including the repercussions of regional tensions and a prolonged foreign currency shortage.
Indicators of economic recovery and declining inflation
The Egyptian economic landscape has witnessed tangible positive transformations, as noted in IMF reports. The tight monetary policies implemented by the Central Bank of Egypt have successfully curbed inflation. According to the data, the annual urban inflation rate fell to 12.3% by November 2025, a significant decrease from its peak of 38% in September 2023. The influx of dollars resulting from the Ras al-Hikma deal and other major Gulf investments, along with improved tourism revenues and remittances from Egyptians abroad, contributed to eliminating the parallel currency market and restoring exchange rate stability.
Structural reforms: the cornerstone for the next phase
Despite praising the "significant gains" noted by Ivana Vladkova Holar, head of the IMF mission, the international institution stressed the need to accelerate the pace of structural reforms. Foremost among these reforms is the implementation of the "State Ownership Policy Document," which aims to facilitate the state's withdrawal from certain economic sectors in favor of the private sector. The IMF believes that progress on government privatization programs still requires a significant boost to ensure a level playing field and strengthen the investment climate.
The strategic importance of new financing
The significance of this agreement extends beyond the cash liquidity it will provide; it also serves as an international "vote of confidence" in the Egyptian economy. This announcement is expected to contribute to lowering the cost of insuring Egyptian debt and improving the country's credit rating, thus facilitating Egypt's return to international debt markets at a reasonable cost. To date, Egypt has received approximately $3.5 billion of the total program, and with the completion of this agreement, it will have taken a significant step towards fulfilling the agreed-upon economic roadmap.
