The International Monetary Fund (IMF) Executive Board has completed the seventh review of Egypt's 48-month Extended Fund Facility (EFF) program and the second review under the Resilience and Sustainability Facility (RSF), approving immediate disbursements totaling approximately $1.77 billion while urging faster implementation of structural reforms to strengthen private sector-led growth.
The latest approval enables Egypt to immediately access SDR 1.11 billion (about $1.5 billion) under the EFF and SDR 200 million (about $272 million) under the RSF, bringing total disbursements under the two arrangements to approximately SDR 5.4 billion ($7.3 billion).
The IMF said Egypt entered the recent period of heightened regional tensions from a stronger macroeconomic position than in previous episodes of external shocks, supported by robust economic growth, declining inflation, and rising international reserves.
According to the Fund, real GDP expanded by 5% in the third quarter of FY2025/26, lifting growth during the first nine months of the fiscal year to 5.2%. The IMF expects the economy to grow by around 4.6% in FY2025/26, only marginally below earlier projections.
Headline inflation eased to 14.3% in June after rising to 15.2% in March, reflecting the impact of exchange rate depreciation and higher energy prices. However, the Fund expects inflation to accelerate again during the second half of 2026 before gradually converging toward the Central Bank of Egypt's target range.
On the external front, the IMF noted that higher oil and gas prices increased pressure on Egypt's current account, but the impact was partially offset by record remittance inflows, resilient tourism revenues, and a gradual recovery in Suez Canal receipts.
The current account deficit is estimated at 4.5% of GDP in FY2025/26, while international reserves remained strong, reaching 119% of the IMF's reserve adequacy metric by the end of June.
The Fund also highlighted Egypt's continued fiscal consolidation, saying the government exceeded its primary balance and tax revenue targets by end-March 2026 through stronger revenue mobilization and expenditure discipline. Gross financing needs declined by 5 percentage points of GDP during FY2025/26, while the primary surplus is expected to rise from 4.8% of GDP in FY2025/26 to 5% in FY2026/27.
Despite the positive macroeconomic performance, the IMF said progress on structural reforms has been uneven, calling for faster implementation of the State Ownership Policy and the government's divestment program to reduce the state's footprint in the economy and create more space for private investment.
The Fund noted that Egypt recently completed the Gabal El Zeit transaction alongside the Ministry of Finance's sale of stakes in listed companies, bringing total divestment proceeds to around $520 million.
Looking ahead, the IMF projected economic growth to moderate to 4.4% in FY2026/27 amid lingering regional uncertainty and higher production costs, while warning that renewed geopolitical tensions, elevated public debt, and slower-than-expected structural reforms remain key downside risks.
Commenting on the Board's decision, Nigel Clarke, IMF Deputy Managing Director and Acting Chair, said Egypt had made substantial progress in restoring macroeconomic stability under the Fund-supported program but stressed that continued fiscal discipline and more decisive structural reforms would be essential to preserve stability, strengthen resilience, and support private sector-led growth.