US Treasury Secretary Janet Yellen vowed to support Egypt's economic reforms after meeting with the North African authorities on Tuesday in Washington.
The North African authorities and Yellen discussed expanding Egypt's $3 billion International Monetary Fund loan program.
Yellen Vows Support to Egypt's Economic Reforms
VIENNA, VIRGINIA - JANUARY 8: U.S. Treasury Secretary Janet Yellen listens during a demonstration while visiting the Financial Crimes Enforcement Network (FinCEN) on January 8, 2024 in Vienna, Virginia. Secretary Yellen is making a visit to FinCEN to examine the progress on the program overseeing the U.S. beneficial ownership information registry.
On Tuesday, an IMF spokesperson said during their visit to Washington that the Egyptian officials, including the country's finance minister and central bank governor, were scheduled to meet with IMF managing director Kristalina Georgieva. However, further details were not provided.
In November, Georgieva told Reuters that as Egypt battles the economic fallout from Israel's invasion of Gaza, the IMF was seriously considering extending the country's $3 billion loan program.
Meanwhile, US Secretary of State Antony Blinken held high-level meetings during his visit to the Middle East to stop the Israel-Gaza war from expanding into a wider regional conflict.
Egypt has been severely impacted by recent attacks on Red Sea vessels and the ongoing conflict in the Gaza Strip amid high foreign debt levels, which might disrupt tourism bookings and the import of natural gas.
According to the statement from the Treasury Department, Yellen met with Egyptian finance minister Mohamed Maait, minister of International Cooperation Rania Al-Mashat, and governor of the Central Bank of Egypt Hassan Abdalla to discuss challenges with Egypt from the Gaza war.
"Secretary Yellen underscored strong United States support for Egypt and its economic reform program. She underscored the goal of bolstering Egypt's economy and supporting inclusive, sustainable growth," the Treasury said.
Egypt's $3 billion loan program agreed with the IMF in December 2022 collapsed after the North African country failed to let its currency float freely or make progress on the sale of state assets. The US, the IMF's largest shareholder, postponed payments of approximately $700 million that were scheduled to be made in 2023.
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Egypt's Economic Situation
Egypt began the new year by raising prices for key services as the government attempted to increase revenue and expand its IMF rescue package. The Egyptian Electricity Holding Company reported that household electricity prices were raised between 16% and 26%. The cost of electricity increased by almost 20% for industries.
Furthermore, metro and train ticket rates have also increased, while internet package prices from the state-run Telecom Egypt have increased by more than 30%.
Egypt's real gross domestic product growth for 2024 was downgraded by the World Bank on Tuesday from 3.7% in an earlier estimate to 3.5%. According to the report, the bank also reduced the nation's GDP growth rate for 2023 to 3.8% from 4.2%.
On Sunday, a report published by Fitch Solutions projected that Egypt's real GDP will expand by 4.1% by 2024.
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