IMF ‘seriously considering' boosting Egypt’s loan programme due to Gaza war impact

The International Monetary Fund (IMF) is "seriously considering" boosting its loans to Egypt as the economic impact of Israel's war on Gaza takes hold, its chief has said.

As well as obliterating Gaza's economy and devastating that of the West Bank, the war is also posing economic difficulty to neighbouring countries including Egypt, Lebanon, and Jordan, IMF’s Managing Director Kristalina Georgieva told Reuters on the sidelines of the Asia Pacific Economic Cooperation Summit.

Loss of tourism and higher energy costs were going to prove especially difficult for these countries, Georgieva said.

Georgieva did not say how much the loan might be increased by, or when this measure might be implemented.

The IMF approved a 46-month, $3 billion loan program for Egypt in December 2022, as the country struggled with soaring inflation and a plummet in the value of its currency.

Based on the agreement with the IMF, Egypt would benefit from the loan over 46 months under the Extended Fund Facility.

But since the deal was reached, two expected reviews stipulated by the IMF for Egypt to receive the loan have been postponed.

Unconfirmed reports have suggested that the reviews will instead be conducted in the beginning of 2024, following the presidential elections slated for December this year, so as not to impact incumbent President Abdel Fattah al-Sisi's popularity during the vote. 

A high-profile economist told The New Arab that the consideration of a loan boost was "a positive move that values Egypt’s increasing political as well as humanitarian role in handling the ongoing crisis in the Palestinian Gaza Strip".

"Logically, world powers will attempt to show their appreciation to Egypt by the most viable means that the regime can understand – money - amid the current economic crisis that has been taking a toll on the country for over years now," said the economist, who spoke on condition of anonymity.