IMF completes Egypt reviews, unlocks $1.8 billion for nation resilient to war effects

The International Monetary Fund has released approximately $1.8 billion to Egypt after completing two reviews of its financial facilities. This funding includes about $1.5 billion from a 48-month loan program and $272 million from the Resilience and Sustainability Facility. Egypt's economy has demonstrated resilience against spillovers from the war in the Middle East, benefiting from a more flexible exchange rate, fuel price adjustments, and reduced state spending. The IMF projects economic growth to reach 5% in the third quarter of the 2025/26 fiscal year, with a full-year forecast of 4.6%. However, the fund cautioned that significant vulnerabilities persist, including high public debt, substantial financing needs, and a large state footprint in the economy. The IMF also noted that efforts to reduce the state's economic role and boost private investment have progressed slower than expected and require acceleration. Meanwhile, a drone strike that ignited fires on two gas vessels in Egypt's Damietta port has introduced a new threat to shipping routes, including the vital Suez Canal. Egypt's cabinet identified the incident as an unidentified drone attack. While Iran has denied any involvement, stating its commitment to regional peace, the strike underscores the escalating risks to global trade and energy transport amid regional tensions.

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Egypt's economy has remained resilient to spillovers from the war in the Middle East.