May 25, 2024

The International Monetary Fund has agreed to more than double a bailout package for Egypt, which is going through its worst economic crisis in decades, exacerbated by war in the neighboring Gaza Strip and in Ukraine.

The fund now plans to provide Egypt $8 billion, up from an initial $3 billion announced in October 2022.

The I.M.F.’s mission chief to Egypt, Ivanna Vladkova Hollar, noted at a news conference that the already-struggling Egyptian economy had been further hurt by the conflict between Israel and Hamas, which has cut into the country’s vital tourism trade.

At the same time, revenue from the Suez Canal dropped by half after Houthi militants, who say they are acting in solidarity with Palestinians in Gaza, began attacking cargo ships using Red Sea shipping routes.

Prime Minister Mostafa Madbouly of Egypt said that the deal would enable the government to secure an additional $1.2 billion, above the $8 billion, from the I.M.F’s environmental suitability fund and would encourage development partners like the World Bank and the European Union to also give Egypt more loans to help it reach financial stability.

Last week, Egypt secured a deal worth $35 billion with the United Arab Emirates to develop parts of its Mediterranean coast. Egyptian officials celebrated it as the largest foreign direct investment in Egypt’s history.

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