IMF says Egypt making ‘substantial progress’ but needs more tax reforms

Egypt has made progress towards macroeconomic stability and has been streamlining tax and customs procedures, but still needs to widen its tax base, the International Monetary Fund (IMF) said on Tuesday after a review mission to the country.

An IMF team visited Egypt from May 6 to May 18 as part of its fifth review of an $8 billion financial support agreement signed in March 2024.

“Egypt has made substantial progress toward macroeconomic stability,” said IMF Mission Chief for Egypt Vladkova Hollar, who led the team.

“Growth is expected to continue strengthening, and we upgraded our forecast for FY24/25 to 3.8 percent, in light of the stronger-than-expected outturn in the first half of the year,” Hollar said in a statement.

A Reuters poll of 17 analysts last month also forecast growth of 3.8 percent in the 2024/25 fiscal year which began in July.

Egypt’s central bank said last week the economy grew by 4.3 percent in the October-December quarter and projected it would grow by five percent in January-March.

The IMF statement said better oversight and control over large public sector infrastructure projects was helping to contain demand pressure.