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World Bank Announces $700 Million Financing to Boost Egypt’s Economic Resilience

Explore how the World Bank’s $700 million funding aims to propel Egypt’s economic recovery and sustainability efforts
June 25, 2024

In a significant move to bolster Egypt’s economic trajectory, the World Bank unveiled a $700 million budget support package on Monday, marking a crucial part of its broader $6 billion, three-year commitment to the North African nation. This initiative comes amidst a surge of international financing aimed at supporting Egypt’s economic reforms.

The financing aims to enhance Egypt's private sector engagement, fortify macroeconomic stability, and steer the country towards sustainable growth, as outlined by the World Bank.

Earlier this month, the International Monetary Fund (IMF) reached a staff-level agreement on the third review of Egypt’s expanded loan program, potentially unlocking an additional $820 million pending IMF executive board approval. This agreement underscores Egypt’s progress in implementing crucial reforms under its extended fund facility.

Egypt’s decision to float its currency exchange rate earlier this year has improved financing conditions and has been complemented by positive developments such as the Ras Al Hekma investment deal, which is expected to bolster economic prospects.

Looking ahead, discussions within the IMF program may open doors for further funding through the resilience and sustainability facility, contingent upon Egypt’s commitment to environmental stewardship and climate action.

Despite ongoing challenges such as high inflation rates, the IMF projects a decline from current levels of 35 percent to an anticipated 15.25 percent by year-end. The IMF also advocates for targeted spending reforms, replacing broad fuel subsidies with more focused measures to better support vulnerable households.

According to the latest World Bank Global Economic Prospects report, Egypt’s economy is anticipated to grow by 4.2 percent in 2024, with continued expansion into 2025-2026 driven by increased investments and resilient private consumption. While growth is expected to moderate in 2023-2024 due to regional tensions affecting the Suez Canal and tourism, Egypt remains set for economic resilience supported by strategic investments and favorable economic policies.

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