A lender in Washington, DC says Cairo has agreed to raise tax rates and speed up repayment of state-owned enterprises.
The International Monetary Fund (IMF) has announced that it has signed an agreement with Egypt to open a $1.2bn fund to help the country's economic crisis.
The lender in Washington, DC said on Tuesday that it had reached an “employee agreement”, which must be approved by the Executive Board, after Cairo outlined measures to improve financial stability.
Egyptian officials agreed to raise the tax rate by 2 percent of gross domestic product (GDP) over the next two years and speed up the divestment of state-owned companies, among other things, the lender said.
“There is a need to change the package to ensure that Egypt rebuilds reserves to reduce credit risks, and create additional space to increase public spending, especially in health, education and security,” said Ivanna Vladkova Hollar, who led the IMF's talks with Egypt. adults.
The two sides also agreed that there is a need to speed up the transition to business, Hollar said.
“In this context, there is a need for strong efforts to improve governance, reduce the government's role in the economy, and increase the confidence of the private sector to help Egypt attract foreign investment and develop its economic capacity,” he said.
Egypt in March agreed to receive a loan of $ 8bn from the IMF at rates compatible with the economic reforms, extending the agreement to $ 3bn, 46 months that took place in December 2022.
As part of the loan, Cairo agreed to keep its currency low and allow the exchange rate to be determined by market forces.
Egypt has been struggling with double inflation and a lack of foreign currency amid economic challenges including the collapse of the Suez Canal, the war in Ukraine and the fallout from the COVID-19 pandemic.