Source: Almasry Alyoum

JAKARTA – The International Monetary Fund is reassessing Egypt’s commitment to structural reforms, with sources indicating potential complications that could delay the fifth installment of the country’s $8 billion loan program.

Unexpected Developments Threaten Funding Timeline

Multiple sources have revealed surprising developments regarding Egypt’s fifth review under the IMF’s 46-month Extended Fund Facility. The slow implementation of key structural reforms has prompted the Fund to consider consolidating the fifth and sixth reviews, potentially postponing the next loan disbursement by up to six months.

An IMF mission that arrived in Cairo in May to conduct the fifth review has yet to announce positive results or confirm a disbursement date for the new tranche. This comes after the successful completion of the fourth review in March, which enabled Egypt to receive $1.2 billion, bringing the total disbursed amount to approximately $3.5 billion.

Core Reform Challenges

The primary obstacle to completing the fifth review stems from the IMF’s dissatisfaction with Egypt’s performance on structural reforms, particularly:

• State asset divestment: Progress on reducing government ownership in various sectors
• Tax base expansion: Broadening the scope of taxation to increase revenue

These reforms constitute the foundation of Egypt’s agreement with the IMF. According to sources, Egypt has failed to meet half of the structural benchmarks during the last two reviews, despite making acceptable progress on fiscal reforms.

Parliamentary Action on Tax Reforms

The Egyptian Parliament recently approved amendments to the Value Added Tax law, introducing new levies on construction and contracting services, crude oil, cigarettes, and alcoholic beverages. These modifications were initially postponed from the fourth review and are now being implemented as part of the fifth review process.

Official Response and Future Outlook

Dr. Fakhri El-Fiqi, Chairman of the Parliamentary Planning and Budget Committee, acknowledged that structural reforms outlined in the state ownership policy document and privatization program have been affected by recent regional and global events. However, he emphasized that the general budget’s financial indicators show tangible improvement.

El-Fiqi noted that discussions with the IMF regarding quantitative performance criteria are progressing well, and dismissed speculation about merging the fifth and sixth reviews. He confirmed that the VAT law amendments were implemented in response to understandings with the Fund.

Timeline Implications

The current delays suggest that the program may be postponed until after the summer period, with the next potential IMF Board meeting scheduled for December. This represents a significant setback for Egypt’s economic reform timeline and could impact the country’s broader financial planning.

The Egyptian government has reportedly requested the IMF to delay publishing the fourth review staff report to allow sufficient time to prepare a detailed plan outlining tax base expansion measures.

Economic Context

This development occurs as Egypt continues to navigate challenging economic conditions, balancing the need for structural reforms with domestic economic pressures. The IMF program remains crucial for Egypt’s economic stability and access to international financial markets.

The situation highlights the ongoing challenges emerging economies face in implementing comprehensive structural reforms while maintaining social and economic stability during periods of regional uncertainty.

Original article:

almasryalyoum.com. (n.d.). صندوق النقد يراجع موقفه من إصلاحات مصر.. مفاجآت تهدد صرف «الدفعة الخامسة» من القرض. Retrieved July 3, 2025, from https://www.almasryalyoum.com/news/details/3491162