Egypt will “soon” begin negotiating with the International Monetary Fund regarding extending the deadline for lifting fuel and electricity subsidies, after it raised petroleum prices between 7% and 17% last Friday, according to an Egyptian government official who spoke to Al-Sharq on condition of anonymity.
The official’s statements to Al-Sharq come after Egyptian President Abdel Fattah El-Sisi confirmed on Sunday that “the agreement with the International Monetary Fund must be reviewed if it will put people in an intolerable situation,” adding during a dialogue session at the World Conference on Population, Health and Human Development, “If it is not taken… Taking into account the challenges we face, including that we have lost $6 to $7 billion in income from the Suez Canal – and this situation is likely to continue for a year – and if the program agreed upon with the Fund will make us put pressure on the people, the government must review this agreement.”
Last Friday, Egypt raised fuel prices for the third time this year, to include the increase in all types of gasoline, diesel, and industrial diesel, by a rate ranging between 7.7% and 17%, which led to the start of varying increases in the prices of products, especially agricultural and food, by a rate ranging between 2% and 15%, according to… Every sector.
The pace of inflation in Egypt's cities accelerated slightly during September, to 26.4% on an annual basis, compared to 26.2% in August, despite investment banks' expectations of a slowdown in its pace.
Last May, the International Monetary Fund Board approved the disbursement of the third tranche of the Egypt support program worth $820 million. At the end of last March, the Fund Board approved the first and second reviews within the framework of the Extended Fund Facility for Egypt, and agreed to increase the value of the original program by about $5 billion. To reach $8 billion; Approximately the size of the loss that Sisi mentioned on Sunday.
Ivana Vladkova Hollar, head of the International Monetary Fund mission in Egypt, called on the government in July to make more progress on various economic reforms. Noting that Egypt needs more structural reforms to increase private sector participation; “We still see a clear slowdown in plans to exit state-owned assets,” she said.
Hollar also called for “liberating the exchange rate of the pound from all restrictions,” lifting energy subsidies, and increasing its prices to reach a break-even point with its cost.
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