Creating new perspectives since 2009

IMF seeks to boost Egypt ahead of possible entry of Gaza refugees

February 23, 2024 at 10:28 am

In this photo International Monetary Fund (IMF) logo is seen in Washington D.C., United States on April 11, 2023 [Celal Güneş / Anadolu Agency]

Talks with Egypt to boost its International Monetary Fund loan programme are making excellent progress, the IMF said yesterday, saying that Egypt needs a “very comprehensive support package” to deal with economic challenges, including pressures from the war in Gaza, Reuters reports.

IMF spokesperson Julie Kozack told a regular news briefing that IMF staff and Egyptian authorities agreed on the main elements of programme changes under combined first and second reviews of Egypt’s existing $3 billion loan, and “authorities have expressed a strong commitment” to them.

She declined to discuss details of the Egypt package as the negotiations are continuing.

Asked about the impact on the talks from challenges posed by the expected entry of Gaza refugees into Egypt, Kozack said: “There is a need to have a very comprehensive support package for Egypt, and we’re working very closely with both the Egyptian authorities and their partners to ensure that Egypt does not have any residual financing needs and also to ensure that the program is able to ensure macroeconomic and financial stability in Egypt.”

The IMF later clarified in a statement that the comprehensive policy package would “support the economic reform program” in Egypt.

The IMF in January cut its Middle East and North Africa GDP growth forecast for 2024 to 2.9 per cent, down 0.5 percentage-point from October, because of the impacts of Israel’s bombing campaign in Gaza. Egypt’s 2024 growth outlook was cut 0.6 percentage point to 3.0%.

The IMF is continuing to monitor the economic impact of attacks on Suez Canal and Red Sea shipping, which is diverting trade flows away from the canal to around the Cape of Good Hope in South Africa, adding time and costs to Europe-Asia voyages, Kozack said.

Read: Dollar madness sweeps Egypt