Arab Republic of Egypt: Fifth and Sixth Reviews Under the Extended Arrangement Under the Extended Fund Facility and First Review Under the Resilience and Sustainability Arrangement, Requests for Rephasing of Access, Extension of the Arrangements, Waiver of Nonobservance of Performance Criterion, and Modification of Performance Criteria-Press Release; and Staff Report

This paper presents Arab Republic of Egypt’s Fifth and Sixth Reviews under the Extended Arrangement under the Extended Fund Facility and First Review under the Resilience and Sustainability Arrangement, Requests for Rephasing of Access, Extension of the Arrangements, Waiver of Nonobservance of Performance Criterion, and Modification of Performance Criteria. Egypt’s macroeconomic situation has improved amid sustained stabilization efforts. Tight monetary and fiscal policies together with exchange rate flexibility have helped restore macroeconomic stability, reduce inflation, and strengthen the external position. Progress on deeper structural reforms has been uneven, and accelerating implementation, particularly reducing the state’s economic footprint and leveling the playing field, remains critical to securing durable, private-sector-led and inclusive growth. In order to foster resilience and support dynamic, inclusive, and export-led growth, decisive efforts to reduce the state’s footprint in the economy will be essential. While rapid progress in trade facilitation, digitalization, and business climate reforms is expected to yield positive growth effects, their impact will remain limited without tangible progress on divestment. Meanwhile, continued implementation of macro-critical climate reforms will further enhance economic resilience.