Azour made these remarks during a press briefing the IMF held on Thursday to release its Regional Economic Outlook report on the sidelines of the annual meetings (Spring Meetings) of the World Bank Group and the IMF in Washington.

He was responding to a question by Ahram Online about the IMF’s projections for Egypt’s overall debt and how Egypt is expected to tackle the debt path under the IMF’s loan program.

“This is one of the main pillars of our program with Egypt, which involves allowing Egypt to reduce gradually the burden of debt, the size of the debt to the GDP, and the debt service,” Azour told Ahram Online.

Egypt is currently engaging in an $8 billion Extended Fund Facility (EFF) loan program.

Azour pointed out that the increase in interest rates globally led to a further increase in debt service for several emerging and middle-income economies in the region.

The IMF, he said, strongly recommends that these countries address this issue decisively and move forward with the needed reforms to allow risk premiums to go down and also reduce the nexus of all the burdens these reforms when it comes to debt and debt restructurings could have on the local financial system.

In this respect, Azour stressed to Ahram Online that Egypt is excluded from countries with fragilities and vulnerabilities regarding their debt burdens.

Under the program, Egypt is expected to tame the debt level to below 80 percent by 2027.

“I don't think that Egypt entered into this classification. Of course, there are a certain number of countries that have a high level of fragility today, and the fund as you know has developed since 2020 various instruments to help those in our part of the world,” explained Azour.

Responding to another question by Ahram Online about the impact of the Red Sea disruptions on the Egyptian Economy, Azour stressed that the war in Gaza and the tensions in the Red Sea have impacted the Suez Canal as one of Egypt's key foreign exchange sources.

In this regard, he highlighted that the Suez Canal’s revenues have dropped by two-thirds and that disruptions in the Red Sea have taken a toll on trade and tourism in Egypt, Lebanon, Jordan, and Iraq.

Furthermore, Azour explained that the current loan program with Egypt aims to help the country take advantage of the recent FX inflows to accelerate the country’s transformation into a private-sector-led economy.

He highlighted that “Egypt is committed to altering the role the public sector plays in the economy so that it becomes a supporter of the private sector rather than a competitor. Moreover, the country is committed to achieving transparency in terms of public expenditure.”

In addition, Azour pointed out that taming Egypt’s inflation is essential under the programme to stabilize the economy and underlined the high social costs involved and the need to address them.

He also noted that the IMF will follow up on implementing the measures dictated by the program to raise the real GDP growth rate, bring down inflation, and expand the social protection programs.

Regionally, Azour spoke of an uneven recovery among the Middle East and Central Asia economies amid high uncertainty, stressing that inflation is receding in most countries and growth prospects diverge between and within regions.

He highlighted that growth is projected to remain subdued, improving moderately to 2.7 percent in 2024, from 1.9 percent last year and reflecting a 0.7% downgrade from October 2023 projections due to the conflict in Sudan and Gaza and the production cuts in the GCC countries.

Azour maintained that the region’s growth is projected to strengthen in 2025 to 4.2 percent as the impact of these temporary factors fades gradually.

Nevertheless, he pointed out that emerging markets and middle-income countries face rising fiscal pressures as elevated interest payment erodes efforts to strengthen fiscal positions, and conflicts heavily impact activity in some fragile and low-income economies.

“Though the economic condition of some of these countries is projected to improve in 2025 as the growth damping factor gradually wanes, the potential lasting economic effects of conflicts are an additional challenge for the region,” Azour explained   

Over the medium term, Azour noted that growth is expected to remain relatively stable among oil-importing economies, including Egypt, supported by strong domestic demand while plateauing hydrocarbon production is projected to weigh on growth in all exporter countries.