IMF could augment Egypt’s loan programme over effects of Gaza war

Managing Director Kristalina Georgieva says the Israel-Gaza war has had an economic impact on neighbouring countries.

The International Monetary Fund is seeking to increase Egypt’s loan programme due to the effects of the war in neighbouring Gaza, according to a Reuters report.

Managing Director Kristalina Georgieva told Reuters on Friday that the IMF was “seriously considering” a possible augmentation of Egypt’s $3bn loan programme due to economic difficulties posed by the Israel-Gaza war.

Egypt began seeking a new IMF loan after Russia’s war in Ukraine pushed up its bills for wheat and oil while dealing a blow to tourism from two of its largest markets, Ukraine and Russia.

In October last year, the IMF agreed to grant Cairo the loan, adding that the loan programme would include “policies to unleash private sector growth including by reducing the state footprint, adopting a more robust competition framework, enhancing transparency, and ensuring improved trade facilitation”.

Georgieva’s comments came in an interview on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit in San Francisco.

She expressed that the war in Gaza is not only “devastating” the besieged Strip’s population and economy, but also has “severe impacts” on the West Bank’s economy and is also posing difficulties for neighbouring countries like Egypt, Lebanon and Jordan through the loss of tourism and higher energy costs.

At the APEC summit, the 21 members, including the United States, China and Russia, remained divided over the war on Gaza.

A statement issued by this year’s APEC chair, the United States, said the leaders exchanged views on the Gaza crisis, with some objecting to the language of the chair’s statement in an accompanying “Golden Gate Declaration” covering economic issues “on the basis that they do not believe that APEC is a forum to discuss geopolitical issues”.

Some APEC leaders shared the united messages of the November 11 joint Arab-Islamic summit in Riyadh, the chair’s statement said.

Brunei, Indonesia and Malaysia in a joint statement said they were among the APEC leaders who supported the messages of the Riyadh summit, which had called for an immediate end to military operations in Gaza, rejecting Israel’s justification of its actions against Palestinians as self-defence.