Faith Nyasuguta
The International Monetary Fund (IMF) has acknowledged Egypt’s progress toward macroeconomic stability but emphasizes the need to broaden its tax base and streamline exemptions to sustain growth and reduce debt. Following a review mission conducted from May 6 to 18, 2025, as part of an $8 billion financial support agreement initiated in March 2024, the IMF praised Egypt’s improved economic performance.
The IMF upgraded Egypt’s growth forecast for fiscal year 2024/25 to 3.8%, supported by a stronger-than-anticipated performance in the first half of the year.
Egypt’s central bank reported 4.3% growth in the October-December 2024 quarter and projected it would grow by 5.0% in January-March 2025. While inflation slightly rose to 13.9% in April, the fund noted it remains “on a downwards trend.”
The IMF highlighted that Egypt’s efforts to modernize and streamline tax and customs procedures are yielding positive results. However, it stressed that domestic revenue mobilization must continue, primarily by widening the tax base and streamlining tax exemptions.
In March 2024, Egypt raised fuel prices as part of its commitment to the IMF, leading to the approval of a $5 billion augmentation to its loan program, bringing the total to $8 billion. The country also devalued its currency by over 35% to meet IMF conditions, demonstrating its willingness to adhere to the group’s policies.
Egypt’s annual urban consumer price inflation accelerated to 13.6% in March 2025 from 12.8% in February, higher than analysts had expected. Despite the increase, the IMF noted that inflation remains on a downward trend, aided by improved oversight of public infrastructure projects and modernization of tax systems.
The IMF’s recommendations aim to enhance domestic revenue mobilization and support fiscal sustainability, ensuring that Egypt’s economic recovery remains on track. The fund emphasized the importance of continuing reforms to unlock Egypt’s growth potential and achieve long-term economic resilience.
As Egypt works through its fragile recovery, the IMF’s push to widen the tax base has sparked concern among citizens already burdened by high living costs. While the recommendations aim to boost government revenue, critics argue that increased taxation could deepen economic inequality and hurt vulnerable populations. How Egypt implements these reforms will be crucial—not just for growth, but for social stability.
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