The International Monetary Fund announced today, Thursday, that "the war in Gaza has complicated Egypt's already difficult economic situation, including disruptions to maritime shipping and tourism in the Red Sea." A spokesperson for the IMF, Julie Kozak, stated that "discussions are ongoing with Egypt regarding policies that would support the completion of the first and second reviews of the current $3 billion loan program," adding that "additional financing for Egypt will be crucial for the successful implementation of the program, with amounts and payments currently being discussed." She added, "Discussions with Egypt will continue over the coming weeks to activate policies such as tightening monetary and fiscal policy and moving towards a flexible exchange rate."
Egypt's $3 billion loan program has stumbled after the country failed to allow its currency to float freely or make progress in selling state assets. Egypt is already facing high levels of external debt and has been severely affected by the war in Gaza and recent attacks on ships in the Red Sea, which threaten to disrupt tourism bookings and natural gas imports.
