Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), cautioned on Thursday, 24 October, that Egypt’s delay in implementing essential economic reforms risks elevating costs and increasing burdens on its citizens.
Speaking at a virtual press briefing during the IMF and World Bank’s Annual Meetings, Georgieva emphasized the need for prompt action to stabilize the Egyptian economy.
“Delays in necessary actions have raised costs, which ultimately fall upon the people,” Georgieva remarked, noting that while the IMF remains open to adapting Egypt’s reform program to better serve its people, postponing vital measures only heightens their eventual price.
“We can’t serve the country well if we ignore the actions needed now,” she added.
President Abdel Fattah Al-Sisi addressed the nation on Monday, 21 October, instructing government officials to reconsider the IMF’s economic reform program if it increases public hardship.
“If our current agreement with the IMF creates an unbearable strain on the people, it is vital to review it,” he said.
Prime Minister Mostafa Madbouly announced on Wednesday, 23 October, that Egypt intends to reassess the timeline of economic reforms previously agreed upon with the IMF.
In recent months, Egypt has grappled with economic difficulties exacerbated by regional instability, which, Georgieva highlighted, has led to a significant drop in Suez Canal revenues, depriving the country of a crucial source of income.
She noted that 70 percent of revenue from the canal has been lost due to escalating conflicts in the area.
Georgieva, who will visit Egypt in ten days, is expected to meet with Egyptian officials to discuss these issues ahead of the IMF’s upcoming review of its loan program with Egypt.
In November, the IMF’s Executive Board is set to review the fourth phase of Egypt’s 46-month, USD 8 billion (EGP 390 billion) Extended Fund Facility (EFF) loan, signed in December 2022 and expanded in March 2024. The outcome of this review will determine whether Egypt can access the next USD 1.3 billion (EGP 63.4 billion) tranche.
The IMF’s World Economic Outlook, released earlier this week, revised Egypt’s GDP growth forecast downward to 2.7 percent for fiscal year 2023-2024 and to 4.1 percent for 2025-2026.
