IMF may merge reviews of Egypt's program, delay $1.2B aid disbursement

Updated 7/2/2025 7:45:00 AM

Arab Finance: The International Monetary Fund (IMF) could merge its fifth and sixth reviews of Egypt's $8 billion support program, which may delay the disbursement of $1.2 billion by half a year, Reuters reported, citing three people familiar with the matter.

The possible delay is attributed to Egypt's slow progress on structural reforms, which are the main guarantee of the facility, including the divestment of state assets.

Reuters noted that a delay in the fifth review would result in the program being hindered until after the summer, with the next board meeting likely in December at the earliest.

On June 29th, the Egyptian parliament approved raising value-added tax (VAT), which will increase taxes on construction services, crude oil, cigarette, and alcohol.

A source said that this VAT hike may trigger thr IMF staff report.

In March, the IMF completed its fourth review of Egypt’s economic reform program under the Extended Fund Facility (EFF), unlocking access to $1.2 billion.

An IMF delegation, led by Chief Mission Vladkova Hollar, visited Egypt during May and began the fifth review, but has yet to signal its approval.

Holler affirmed that Egypt made substantial progress toward macroeconomic stability.

On April 2nd, the Egyptian government announced it received the $1.2 billion fourth tranche from the IMF.

Regarding Egypt’s economic performance, the IMF, in its April’s World Economic Outlook Report, raised its forecast for the country’s economic growth to 3.8% for the current fiscal year (FY) 2024/2025, surpassing a previous estimate of 3.6%.