IMF Staff Completes Egypt Mission, Cites Progress on EFF Review; Talks to Continue

Daily News Egypt

28-05-2025

An International Monetary Fund (IMF) staff team has completed a review mission to Egypt, citing good progress with Egyptian authorities on assessing economic performance and policy commitments under the country's Extended Fund Facility (EFF) arrangement. Talks will continue virtually to finalise an agreement on policies and reforms necessary for the completion of the fifth review.
An IMF staff team, led by Ms. Vladkova Hollar, visited Cairo from 6 to 18 May, holding what were described as productive discussions on economic and financial policies.
At the end of the mission, Ms. Vladkova Hollar issued a statement on Tuesday, 27 May 2025:
'The Egyptian authorities and IMF staff held constructive discussions which have advanced the technical work and policy discussions as part of the Fifth Review under the Extended Fund Facility.'
The statement noted that as Egypt's macroeconomic stabilisation is taking root, it is now time to accelerate and deepen reform efforts to reduce the state footprint, level the playing field, and improve the business environment.
'Egypt has made substantial progress toward macroeconomic stability,' Ms. Hollar said. 'Growth is expected to continue strengthening, and we upgraded our forecast for FY24/25 to 3.8 percent, in light of the stronger-than-expected outturn in the first half of the year. At the same time, the private investment share in total investment rose from 38.5 percent in H1 FY23-24 to almost 60 percent over the same period in FY24-25.'
She added, 'Inflation rose slightly to 13.9 percent in April but remains on a downward trend. The current account remains wide, as rising imports, reduced hydrocarbon output, and Suez Canal disruptions offset strong tourism, remittances, and non-oil exports. Greater fiscal prudence—including through better oversight and control over large public sector infrastructure projects—is helping to contain demand pressures, with total public investment spending remaining below the established ceiling for July – December 2024.'
The IMF welcomed Egypt's recent efforts in tax and customs procedures. 'We welcome the authorities' recent efforts to modernize and streamline tax and customs procedures to increase efficiency and build confidence. These reforms are starting to yield positive results,' Ms. Hollar stated. 'Alongside these efforts, domestic revenue mobilization will need to continue, mainly by widening the tax base and streamlining tax exemptions, to support the government's capacity to spend sufficiently on priority development and social needs. We also welcome the authorities' efforts to develop a medium-term debt management strategy that aims to improve transparency and gradually reduce the large debt service cost in the budget.'
Ms. Hollar emphasised the need for continued structural changes. 'With the macroeconomic stabilization now underway, it is critical for Egypt to carry out deeper reforms to unlock the country's growth potential, create high-quality jobs for a growing population, and sustainably reduce its vulnerabilities and increase the economy's resilience to shocks,' she said.
'In order to deliver on these objectives, decisively reducing the role of the public sector in the economy and leveling the playing field for all economic agents should be key policy priorities. The implementation of the State Ownership Policy and the asset divestment program in sectors where the state has committed to reduce its footprint will play a critical role in strengthening the ability of the private sector to better contribute to economic growth in Egypt. Complementing this, efforts need to continue to improve the business environment.'
Concluding her statement, Ms. Hollar said: 'We are grateful for the warm hospitality extended by the authorities during this mission. Discussions will continue virtually to finalize agreement on the remaining policies and reforms that could support the completion of the fifth review.'