Egypt's Bold Moves to Curb Energy Subsidies Amid Economic Challenges

Egypt is steadfast in its commitment to reduce energy subsidies to cost recovery levels by December 2025, aiming to curb its current account deficit. The IMF supports this initiative, granting a $1.2 billion disbursement as part of Egypt's extensive economic reform program.

Egypt is determined to slash its energy subsidies to reach cost recovery levels by December 2025, as part of its efforts to narrow a significant current account deficit, according to a statement by the International Monetary Fund on Wednesday.

Ivanna Hollar, the IMF mission chief for Egypt, reaffirmed the nation's steadfastness on the commitment made in 2024. Hollar noted that fuel prices are expected to match cost by the year's end and outlined that the economic challenges extend beyond the Suez Canal to the energy sector, affecting the trade deficit.

The IMF approved a $1.2 billion fund disbursement after Egypt's economic reform program's fourth review. The government continues its financial reforms despite challenges like the impact of conflicts on shipping and maintaining some level of diesel subsidies amidst soaring current account deficits.

(With inputs from agencies.)