Egypt Urged to Accelerate Reforms as IMF Calls for Stronger Fiscal Discipline and Private Sector Growth

Osmara Digital Media

CAIRO, Egypt — The International Monetary Fund (IMF) has called on Egypt to sustain fiscal consolidation and accelerate structural reforms aimed at strengthening debt sustainability, rebuilding financial buffers, and promoting private sector-led economic growth. In its latest assessment, the IMF said expanding Egypt’s tax base and improving domestic revenue mobilisation remain essential to reducing public debt and creating space to respond to future economic challenges.

The Fund welcomed Egypt’s move to resume the automatic fuel pricing mechanism, describing it as a key step toward reducing untargeted energy subsidies and moving closer to energy cost recovery.

The IMF also stressed the importance of strengthening public financial management and addressing fiscal risks linked to state-owned enterprises (SOEs), including the Egyptian General Petroleum Corporation (EGPC), to protect long-term economic stability.

To ease financing pressures, the IMF recommended that Egypt maintain primary budget surpluses, extend debt maturities, and continue voluntary liability management operations. It also encouraged reducing reliance on short-term and non-market financing, broadening the investor base, mobilising concessional financing, and improving debt management.

The Fund noted that Egypt’s banking sector remains resilient despite global economic uncertainties but urged stronger contingency planning to enhance financial stability. It welcomed the completion of governance assessments for state-owned banks and called for timely implementation of corrective measures to improve risk management.

On structural reforms, the IMF said progress has been uneven and urged Egypt to accelerate the divestment of state-owned assets, implement the State Ownership Policy, and strengthen the governance of public enterprises.

The Fund added that improving the business environment, facilitating trade, and strengthening competition policies would help attract investment, increase productivity, and support sustainable economic growth. It also highlighted the importance of climate-related reforms in building resilience against future economic and environmental challenges.

The IMF said decisive implementation of these reforms would be critical to improving Egypt’s economic outlook and supporting inclusive growth driven by the private sector. Source: International Monetary Fund (IMF) economic assessment on Egypt.