Egypt receives new IMF deal to help fight Covid-19

The Egyptian government has secured a preliminary agreement with the staff of the International Monetary Fund (IMF) to secure funding of $ 1.6 billion.

This is what the institution said in a statement posted on its website.
According to the IMF, the preliminary agreement is part of the second review of the country’s economic program supported by the IMF’s 12-month standby agreement.

This program, which has been implemented over the past 12 months, aimed to maintain Egypt’s macroeconomic stability during covid-19, while protecting necessary social and health spending, and pursuing structural reforms vital to the economy.

According to Céline Allard, IMF chief of mission for Egypt, most of the objectives foreseen under this program have been achieved. “During the past 12 months, the strong performance and commitment of the authorities have made it possible to achieve the program objectives […] The net accumulation of international reserves and the primary balance have exceeded the program objectives. Inflation remained moderate, with the March result (4.5%) exceeding the lower limit of the monetary policy consultation clause, ”she said.
He added: “all structural benchmarks have been achieved, in particular the pursuit of reforms related to budget transparency and governance, social protection and improvement of the business environment, while pursuing efforts aimed at reducing debt vulnerabilities and creating more fiscal space for priority spending ”.

It should be noted that despite the impact of the covid-19 crisis which affected at least 256,124 people in the country with 14,807 deaths, the Egyptian economy has been particularly resilient during the year 2020.

According to the IMF, Egypt recorded a growth of 3.6% last year, even as Africa recorded a historic contraction of its GDP (-2.1% according to the AfDB). Additionally, as the pandemic has made it difficult for the African diaspora to send remittances to the continent, the World Bank says the country is among the top five destinations for global remittances in 2020.

Let us recall that in total, it is $ 5.2 billion which was granted to Egypt by the IMF within the framework of the confirmation agreement concluded in June 2020. The new disbursement will have to be validated by the board of directors. , before being effective.

Note that according to the Fund, “growth [of the Egyptian economy, Editor’s note] should be 2.8% during fiscal year 2020/21 and reach 5.2% during fiscal year 2021 / 22. However, uncertainty remains, against the backdrop of the persistent risks associated with the pandemic ”.