CAIRO (AP) — The International Monetary Fund says it is allowing Egypt to draw down about $2.3 billion of a previously approved loan, noting that the country has made progress in restoring economic stability and reducing inflation as part of a reform program.
In a statement on Wednesday, the IMF said the decision to release funds followed a review of government reforms, which it attributed to a “broad-based economic recovery” in the Arab world’s most populous country. It noted that gross domestic product grew at a rate of 4.4% from 2024 to 2025.
A $3 billion bailout loan for Egypt approved in 2022 has been increased to $8 billion in 2024 – an effort to prop up an economy hit by a staggering shortage of foreign currency and soaring inflation, which peaked at 38% in September 2023.
Inflation fell to 11.9% in January, the Washington-based fund said in a statement.
Measures Egypt took to deal with inflation included flotation of the Egyptian pound and interest rate hikes.
However, the IMF noted that progress “has been uneven.” She said too much of the economy remains in state hands and that “resolute efforts will be necessary to reduce the state’s footprint in the economy.”
Egypt’s economy has been hit hard by the coronavirus pandemic, the effects of the large-scale Russian invasion of Ukraine and the war between Israel and Hamas in Gaza.
In addition, attacks by Yemen’s Houthi rebels on shipping lanes in the Red Sea have reduced the revenue of the Suez Canal, a major source of foreign currency. The attacks forced shipping out of the channel and around the tip of Africa.
According to the latest government figures, about 30% of people in the country of more than 108 million people live below the poverty line.
