The International Monetary Fund (I.M.F.) has stepped in to provide much-needed financial assistance to Egypt as the country grapples with its worst economic crisis in decades. The I.M.F. has agreed to more than double its bailout package for Egypt, increasing it from $3 billion to $8 billion.
Egypt’s economy has been severely impacted by various factors, including the conflict in neighboring Gaza and Ukraine. The ongoing war between Israel and Hamas has significantly affected Egypt’s tourism industry, while attacks on cargo ships in the Red Sea by Houthi militants have led to a sharp decline in revenue from the Suez Canal.
Prime Minister Mostafa Madbouly welcomed the increased bailout package, which will also unlock additional funds from the I.M.F.’s environmental suitability fund. The government hopes that this financial support will encourage other development partners like the World Bank and the European Union to provide further assistance to stabilize Egypt’s economy.
In an effort to combat soaring inflation, Egypt’s Central Bank recently devalued the currency by more than 35 percent and raised interest rates. The government and the I.M.F. have agreed on a structural reform plan aimed at boosting foreign currency reserves, reducing the debt burden, attracting foreign direct investments, and promoting economic growth.
Despite facing criticism for overspending on megaprojects and mismanagement, President Abdel Fattah el-Sisi defended his government’s policies, attributing Egypt’s economic challenges to the aftermath of the 2011 uprising. However, many Egyptians blame the president for prioritizing vanity projects over the country’s economic stability.
Financial experts believe that the I.M.F. will now take a more cautious approach in its dealings with Egypt, learning from past mistakes and focusing on addressing the underlying issues in the country’s economy. With the new bailout package in place, Egypt is hopeful that it can navigate through its current economic turmoil and work towards a more stable future.
