What would a revised IMF program look like? Last week, IMF boss Kristalina Georgieva said she will land in Egypt within days to “see for herself what is happening in the country.” This came during the same press briefing that she signaled openness to changing Egypt’s loan terms, adding that the Fund has “been very open to adjust the Egyptian program or any other program to what is best to serve people.” So what can we expect from a revised program?

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Three possible scenarios: Egypt is preparing three possible revisions to the loan agreement to present to Georgieva and her accompanying delegation when they land in Egypt mid-next week, government officials told EnterpriseAM.

#1- Extending the timeline for implementing reforms: The first scenario proposes extending the loan program by two years so Egypt ends up having five years to implement the reforms and unlock the entire USD 8 bn in funding. The move will give the country some breathing room to see moves to boost revenue and investment bear fruit.

#2- Growth stimulating measures: The second scenario would give the government a year to carry out a stimulus package that includes pausing energy price hikes and slashing interest rates in efforts to boost growth. The move would reduce cost burdens for citizens and businesses and ease the pace of reforms.

#3- Increased funding for social protection: The third and final scenario suggests securing additional IMF funding, while maintaining the program’s current structure and timeline. This increase would enable the government to strengthen social protections through a robust package aimed at raising the minimum wage, providing periodic pension bonuses, stabilizing prices, boosting contributions to the Takaful and Karama programs, and expanding healthcare services.

Option three seems unlikely? The Fund’s Middle East and Central Asia head Jihad Azour last week said that additional funds were unlikely, adding that “the macroeconomic conditions today are showing that the program as it's designed and its finance is still appropriate.”

Exceptional times: Regional tensions — and their impact on Suez Canal revenues — mean that Egypt needs more time to achieve agreed-upon program targets, our sources said, adding that Egypt needs to slow down the rate of lifting subsidies and start cutting rates to attract investments.

Remember: After President Abdel Fattah El Sisi made headlines for stating that Egypt mightreevaluate its agreement with the IMF in light of economic pressures the nation is enduring as the country carries out reforms as part of the loan agreement, Prime Minister Madbouly confirmed that the government is currently reviewing the timeline and reforms put forward by the Fund. Madbouly highlighted the direct impact that the war on Gaza and the subsequent decline in Suez Canal revenues has had on state revenues as justification for the review.

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