File Photo: A view of vehicles and pedestrians at a street market in Attaba Square in the centre of Egypt's capital Cairo. Ahram Online
According to the IMF, strong foreign exchange buffers and spending discipline continue to shield the economy from regional war spillovers, even as progress on structural reforms remains uneven.
The IMF action comes amid the severe consequences of the ongoing escalation in the Middle East caused by the Iran-US confrontation. These implications have directly and indirectly affected the Egyptian economy since these tensions erupted in February this year.
Completion of the combined reviews brings total disbursements under both IMF arrangements to $7.3 billion. External resilience is supported by gross international reserves reaching 119 percent of the IMF's Assessing Reserve Adequacy (ARA) metric, anchored by record remittances, tourism receipts, and recovering Suez Canal revenues.
Moreover, Egypt’s GDP growth is projected at 4.6 percent for FY2025/2026, which ended in June 2026, before easing to 4.4 percent in FY2026/2027, while headline inflation, which stood at 14.3 percent in June, is projected to rise temporarily to 16.7 percent in the second half of 2026.
Fiscal consolidation remains on track, with the primary surplus expanding from 4.8 percent to 5 percent of GDP in FY2026/2027.
Despite reaching $520 million in recent divestment proceeds, including the Gabal El Zeit transaction, the fund urged faster implementation of the State Ownership Policy to curb the public footprint and spur private-sector growth.
Egypt is still navigating the consequences of the regional escalation, including the wider Middle East conflict and the pressure it places on foreign exchange, trade flows, and investor sentiment.
In its latest assessment, the IMF said Egypt's economy has remained resilient despite these shocks but warned that progress on structural reforms has been slower than expected, particularly in the state divestment and ownership reform agenda. This means Cairo has been credited for its stabilization measures but is still being urged to move faster on long-promised reforms that would expand private-sector participation and reduce the public sector's dominance in key industries.
The main structural sticking point remains divestment. The IMF has repeatedly said that reducing the state’s role in the economy, advancing the State Ownership Policy, and accelerating asset sales are central to unlocking more durable private-sector-led growth.
While Egypt has made some progress through transactions such as the Gabal El Zeit deal and recent IPO and divestment activity, the IMF has still urged faster implementation because the pace has lagged behind earlier commitments.
In that sense, the $1.8 billion disbursement is both a vote of confidence in Egypt's ability to absorb shocks and a reminder that the real test is structural, not just macroeconomic.
Short link: