IMF to complete 3rd EFF review for Egypt in June, unlocks $820mln draw

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The International Monetary Fund (IMF) is expected to complete the third review under the Extended Fund Facility (EFF) for Egypt by the end of June 2024, enabling the country to draw about $820 million of the $8 billion loan program, IMF Mission Chief for Egypt Ivanna Hollar said during a press conference.

“The next review will be the third review under the EFF and is expected to take place on a quarterly cycle, meaning that we would expect it to be completed and considered by the IMF Executive Board by end-June 2024,” Hollar stated.

The fourth through eighth reviews are scheduled to occur every six months thereafter, with each payout set to be around $1.3 billion, she highlighted.

The final review is planned to take place in the fall of 2026, she added.

Moreover, Hollar pointed out that the IMF anticipates a recovery in the economy over the upcoming fiscal year, assuming that constraints encountered by the private sector due to the restrictions on foreign exchange availability are eased once again, provided that the external shocks now affecting Egypt do not worsen.

She added that the IMF has upgraded Egypt’s growth forecast to below 4.5% for next year.

In addition, inflation is anticipated to persist at elevated levels in the near future. The average inflation rate projection for the upcoming fiscal year is 25.5%, with an anticipated 15.25% increase by the year-end.

As for energy subsidies, Hollar highlighted that “the commitment under the program is to continue reducing them using the fuel price adjustment mechanism that has been proposed by the authorities in favor of using some of those resources to better target the resources that are going to households which need additional income support.”