The International Monetary Fund (IMF) has approved Egypt’s request for USD 2.772 bn in financial aid to address the urgent balance of payment needs stemming from the COVID-19 outbreak, Invest-Gate reports.

“Egypt achieved a remarkable turnaround before the COVID-19 shock, carrying out a successful economic reform program supported by the IMF’s Extended Fund Facility (EFF) to correct large external and domestic imbalances,” according to an official statement on May 11.

However, “The COVID-19 pandemic has drastically disrupted people’s lives, livelihoods, and economic conditions in Egypt. The global shock has resulted in a tourism standstill, significant capital flight, and a slowdown in remittances, resulting in an urgent balance of payments need,” according to Geoffrey Okamoto, first deputy managing director, and acting chair at the IMF.

The emergency support will help the North African country limit the decline in international reserves and provide financing to the budget for targeted and temporary spending, aimed at mitigating the economic impact of the pandemic, Okamoto clarified.

He further highlighted, “As the crisis abates, measures to lower the debt level would need to resume along with the continued implementation of structural reforms to increase the role of the private sector to achieve higher and inclusive private sector-led growth and job creation, unlocking Egypt’s growth potential and entrenching resilience.”

Earlier, Prime Minister Mostafa Madbouly had announced that the proposed investment budget for FY 2020/21 will rise to EGP 230 bn from EGP 150 in the previous fiscal year.