Egypt is embarking on a comprehensive survey to assess the impact of its dramatic economic reforms on the country’s vast population, the largest in the Middle East. This effort is being undertaken in close collaboration with the International Monetary Fund (IMF) to ensure the most vulnerable segments of society are protected, Bloomberg reports.
The survey’s findings will be a key topic of discussion during IMF Managing Director Kristalina Georgieva’s planned visit to Cairo in early November. Egypt has signaled a desire to review the targets and timelines of its $8 billion IMF loan deal, citing the challenging regional landscape.
The new data will shed light on the effects of two years of currency devaluations and price hikes on household spending. Jihad Azour, the IMF’s director for the Middle East, North Africa, and Central Asia, explained that the insights will allow both the IMF and the Egyptian government “to make sure that the social programs that Egypt has can be made more effective.”
Egypt, home to over 106 million people, secured the expanded IMF loan deal in March as part of a broader global bailout plan. The country’s economy has been grappling with a foreign-exchange crisis since early 2022. The government has implemented sharp cuts in subsidies for fuel, bread, and electricity, adding further pressure on consumers.
President Abdel-Fattah El-Sisi acknowledged on October 20th that the IMF pact is being implemented under “extremely difficult” regional and economic conditions, referencing the ongoing Israeli conflicts with Hamas and Hezbollah. He indicated a review of the agreement may be necessary if the financial strain becomes unbearable for ordinary Egyptians.
The IMF has expressed openness to adjusting Egypt’s program, while maintaining that the loan amount is likely to remain unchanged. The lender is emphasizing the importance of sustaining currency reform, following the Egyptian pound’s near 40% plunge in March and the government’s commitment to letting the currency’s value reflect supply and demand.
Egypt has pledged to sell over two dozen state-owned assets, a key component of the IMF-backed plan to reduce the government’s role in the economy while attracting crucial foreign investment. However, no major sales have been announced since the last currency devaluation.
Azour also shared positive developments regarding Egypt’s financial standing. He noted that the IMF’s recent decision to reduce borrowing costs for heavily indebted nations will save Egypt roughly $800 million by 2030. Furthermore, discussions regarding Egypt’s access to the IMF’s Resilience and Sustainability Facility have progressed well and will continue next month, though a specific timeframe for reaching a deal was not disclosed.
Finally, Azour expressed optimism about recent improvements in Egypt’s overall macroeconomic picture, deeming them “encouraging.”
