Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), reaffirmed the IMF’s ongoing commitment to supporting Egypt’s economic reforms despite external pressures. Speaking at the AlUla Conference for Emerging Market Economies, Georgieva emphasized that political matters are outside the IMF’s mandate, highlighting the institution’s focus on economic fundamentals.
This statement comes amid Egypt’s ongoing 46-month IMF loan program, initially approved in 2022 and later expanded to $8 billion in 2024, as the country grapples with a severe economic crisis characterized by high inflation and acute foreign currency shortages.
Georgieva acknowledged that Egypt is facing substantial economic challenges, exacerbated by regional instability and geopolitical tensions. She specifically noted the impact of lost revenues from the Suez Canal, which have significantly affected the country’s fiscal position. However, she underscored that the IMF’s support for Egypt’s economic reform path would remain a priority.
“We look at the macro position of a country, and we concentrate on the economy. There are matters of politics that are not in our domain. We are not the best institution to comment on that. So I can confirm that for the fund to support the Egyptian economy in the path of reforms, this is and will remain a priority,” Georgieva said in an interview with Asharq.
Georgieva also praised Egypt for undertaking bold reforms, such as allowing the exchange rate to reflect market conditions, progressing with privatization, and reducing subsidies to strengthen the country’s position. These reforms, she noted, would contribute to Egypt’s competitiveness and enhance private sector participation.
“The more the government does what is necessary, the stronger the position of Egypt. We are looking at the progress today, and actually, our board will soon discuss the second review of the program,” she added.
Looking ahead, Georgieva confirmed that the IMF would present the outcome of the review to the IMF Board of Directors, with a discussion and decision to follow. Despite the rapidly changing global environment, she emphasized the IMF’s continued engagement with Egyptian authorities to ensure the program’s progress.
In addition to discussing Egypt’s reforms, Georgieva addressed Syria’s potential engagement with the IMF. She noted that the IMF’s involvement with Syria had been “unfortunately interrupted” since 2009, and she expressed hope for a resolution to the ongoing civil war. Georgieva also confirmed that the IMF had resumed staff-level engagement with Syria to address critical economic data gaps and would be ready to support the country once conditions allowed.
The AlUla Conference, organized by the IMF and Saudi Arabia, serves as a significant platform for emerging markets to discuss policy challenges and opportunities. Georgieva highlighted the importance of the event, noting the participation of over 70 central bank governors, finance ministers, and international organizations, all focused on tackling the global economic challenges faced by emerging markets.
“We have over 70 central bank governors, ministers of finance, and representatives of international organizations gathering here,” Georgieva said. “The agenda is very interesting. All the topics you cover are being discussed today and tomorrow. Well, we hope it is a successful conference, and we are looking forward to the additions next year and so forth,” she added.
On the other hand, Dr. Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), revealed that the fourth review of Egypt’s loan agreement will include a new program focused on environmental sustainability and transition.
Azour, speaking at the Al-Ula Conference for Emerging Markets, explained that upon approval of this review, Egypt will be able to access the fourth tranche of $1.2 billion, along with an additional $1.3 billion from the Resilience and Sustainability Trust Fund.
He added that the new program, titled “Flexible Sustainability Facilitation,” will address key environmental and transition issues, complementing the existing program. This initiative aims to support Egypt’s efforts toward achieving sustainable development goals.
As a result, the fourth review and the new program will be presented for approval, with the IMF’s working team collaborating with Egyptian authorities to finalize the necessary procedures. These items will be placed on the agenda of the IMF’s Executive Board in the coming weeks.
By the end of 2024, the IMF announced that it had reached an expert-level agreement on the fourth review under the Extended Fund Facility (EFF) arrangement with Egypt. This could unlock $1.2 billion from the $8 billion loan agreed upon in March 2024, which will be disbursed over a period of 46 months.
