(Bloomberg) -- Egypt said it’s working with the International Monetary Fund on reviewing the targets and timetable for its $8 billion loan program against a backdrop of regional upheaval.
“Unprecedented” events across the Middle East are posing challenges for Egypt, Prime Minister Mostafa Madbouly said Wednesday, singling out a decline in Suez Canal revenue caused by militant attacks on Red Sea shipping.
“We’re looking with the fund on how to target the review of our timings and goals,” Madbouly told reporters in Egypt’s new administrative capital, without giving more details. The IMF will conduct its next program review after this week’s annual meetings in Washington, he said.
Egypt agreed on the expanded IMF program in March after carrying out its fourth devaluation of the pound since it plunged into economic crisis in early 2022. That deal — along with a $35 billion investment from the United Arab Emirates — are the cornerstones of a global bailout intended to shore up the Middle East’s most populous country as shockwaves from the Israel-Hamas war roil the region.
Cost-cutting is a key part of the IMF deal, and authorities have in recent months sharply cut subsidies on fuel, electricity and bread.
Continuing such moves may pose a challenge for the government in Egypt, where a population of more than 106 million has been struggling with two years of soaring prices. Inflation, while down from last year’s record highs, slightly quickened for a second month to top 26% in September.
Houthi rebels in Yemen have targeted ships in the southern Red Sea since late last year in solidarity with Hamas in Gaza, forcing many vessels to avoid what was one of the world’s major shipping routes. Egyptian President Abdel-Fattah El-Sisi has said the country has lost more than $6 billion in potential canal revenue.
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