Amid the devastating Israeli war on Gaza, the International Monetary Fund (IMF) is considering expanding Egypt’s $3 billion loan program by an unspecified amount, Kristalina Georgieva, the fund’s managing director, said on Friday.
Georgieva acknowledged the severe economic difficulties faced by Egypt as a result of the war, during an interview with Reuters on the sidelines of the Asia Pacific Economic Cooperation Summit.
She also emphasized the detrimental impact on Gaza’s population and economy, as well as the ripple effects on the economy of the West Bank.
The repercussions of the conflict are not limited to the Palestinian territories, she said.
“It is also posing difficulties for neighboring countries Egypt, Lebanon, and Jordan through the loss of tourism and higher energy costs,” Georgieva added.
Egypt is racing to fulfill its commitments under the IMF’s Extended Fund Facility (EFF) loan program, which was approved in December.
Egypt has yet to complete any of the reviews stipulated in the loan agreement. The program, spanning four years, allows Egypt to access $3 billion in eight installments.
Egypt’s key commitments include implementing a flexible regime for interest rates and exchange rates, boosting the role of the private sector, and reducing both debt and inflation levels to pre-pandemic figures by the end of the program.