The International Monetary Fund and Egyptian authorities reached a staff-level agreement on Monday that, once ratified by the fund’s executive board, will release approximately $1.6 billion. The bulk—$1.5 billion—comes under the Extended Fund Facility, with a further $136 million linked to the Resilience and Sustainability Facility. Completion of the seventh EFF review and the second RSF review would lift total disbursements under the arrangements to about $7.2 billion, the IMF said.

Viewed from Washington, the deal signals continued confidence in Cairo’s policy course despite a volatile regional backdrop. The IMF mission chief noted that the impact of the Middle East war on Egypt’s economy has remained “relatively contained,” crediting timely fuel and electricity price adjustments, curbs on government energy consumption, and reprioritised spending. Real GDP growth reached 5 percent in the third quarter, putting the first three quarters of the fiscal year at 5.2 percent. Yet headline urban inflation stayed elevated at 14.6 percent in May and is projected to hit 15.8 percent by the fiscal year-end, above pre-war forecasts. The fund urged Egypt to keep monetary policy tight and to treat exchange-rate flexibility as the “first line of defence” against external shocks.

Cairo is coupling the IMF-backed stabilisation with a push to rebalance the economy toward the private sector. The planning minister said the government’s 2026/27 development plan targets a private-sector share of total investment of around 59 percent. Separately, the investment and foreign trade minister outlined a revamp of startup financing, including updated rules for convertible securities and a new sovereign-fund mechanism to bridge late-stage funding gaps. The state is also developing an integrated investment data system to inform policy. On the trade front, the ministry aims to expand the base of exporting firms by linking them to global value chains and upgrading inspection laboratories.

Fiscal performance has exceeded targets: by end-March, Egypt surpassed its primary balance and tax revenue goals, and the IMF projects the primary surplus will rise from 4.8 percent of GDP in 2025/26 to 5 percent in 2026/27. The fund stressed that faster divestment of state assets under the State Ownership Policy is critical to sustaining private-sector-led growth. The next concrete milestone is the IMF executive board’s decision on the staff-level agreement, while implementation of the privatisation programme—including the preliminary listing of four state-owned companies announced in June—will be closely watched as a gauge of reform momentum.