The International Monetary Fund (IMF) announced on Tuesday the completion of its fourth review of Egypt’s economic reform programme, approving a $1.2 billion disbursement and the access to an additional $1.3 billion under the Resilience and Sustainability Facility (RSF).
Egypt has been grappling with soaring inflation and rising living costs, exacerbated by recent increases in fuel prices, subway fares, and the depreciation of the Egyptian pound. The measures are part of the government’s efforts to meet IMF conditions for financial assistance, but they have placed significant strain on households.
In October 2023, Egypt raised fuel prices by 10% to 17%, impacting the cost of goods and services. For example, the price of diesel, essential for public transport, increased from 11.5 pounds ($0.23) to 13.5 pounds ($0.25) per litre, while 92-octane gasoline rose to 15.25 pounds ($0.31) from 13.75 pounds ($0.28).
To mitigate the impact of economic reforms, the Egyptian government has implemented social protection initiatives, including wage increases for public and private sector workers. In March 2024, the minimum wage for private sector workers was raised to 7,000 Egyptian pounds ($138) per month, with public sector workers set to receive the same increase starting in July.
The latest disbursement of 1.2 billion underscores the IMF’s confidence in Egypt’s reform efforts, which include measures to reduce subsidies, liberalise the exchange rate, and strengthen social safety nets.
The additional $1.3 billion under the RSF will support Egypt’s efforts to address climate-related challenges and build resilience against external shocks.
