Egypt’s economic challenges are seemingly being mitigated per the International Monetary Fund (IMF), as it only needs to widen its tax base to completely recover from one of its worst economic hits in recent history.
- Egypt faces ongoing economic challenges but has made strides in stabilizing its macroeconomy, according to the IMF.
- The IMF conducted a mission to Egypt as part of a review of its $8 billion assistance arrangement, forecasting growth to strengthen further.
- Inflation rates in Egypt decreased notably in early 2025, marking progress in managing the country’s economic crisis.
The International Monetary Fund (IMF), following its view mission to Egypt, deduced that the North African country only needs to widen its tax base to buttress the advancements it has made towards macroeconomic stability.
“Egypt has made substantial progress toward macroeconomic stability,” said IMF Mission Chief for Egypt Vladkova Hollar.
Hollar led the IMF delegation to Egypt from May 6 to May 18, as part of its sixth review of a $8 billion financial assistance arrangement in March 2024.
“Growth is expected to continue strengthening, and we upgraded our forecast for FY24/25 to 3.8%, in light of the stronger-than-expected outturn in the first half of the year,” he added.
Egypt, which currently boasts Africa’s largest debt to the IMF, in March 2024, raised the prices of various fuel products, fulfilling a commitment made over a year ago to the International Monetary Fund (IMF) as part of a $3 billion financial assistance agreement.
In the same month, the IMF approved a $5 billion augmentation to its loan program for the country, bringing the total loan package to $8 billion.
The country had earlier devalued its currency by over 35% to open the door for additional loans from the global lender, demonstrating its willingness to adhere to the group’s policies.
At the time, Egypt had dealt with a year long economic crisis, which the country hoped the IMF’s loan would help with.
Egypt economic recovery
As recently as March 2025, the statistics office in Egypt revealed that the country’s inflation rate grew by an annual 12.8% in February, compared to 24% in January.
This was the lowest consumer price level the North African country had experienced since 2022, when it began to fall into an economic recession.
The decrease in inflation stemmed from a year-long foreign currency scarcity, which generated an underground market for dollars before eventually subsiding.
According to the IMF, as seen on Reuters, improved supervision and management of major public sector infrastructure projects was assisting in reducing demand pressure.
The IMF further stated that the government was trying to modernize and simplify the customs and tax processes.
“These reforms are starting to yield positive results. Alongside these efforts, domestic revenue mobilization will need to continue, mainly by widening the tax base and streamlining tax exemptions,” it added.
