The IMF on Wednesday approved the third instalment of a US$12 billion, three-year loan for Egypt, bringing the total released to date to just over $6bn.
The IMF board approved the latest $2bn disbursement under the deal signed in November 2016, after a fund team last month praised Cairo's progress on "bold" economic reforms.
In order to obtain IMF approval for the loan, the country has implemented a set of drastic reforms, adopting a value-added tax, cutting energy subsidies and floating its pound.
But the IMF said the country still has work to do.
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"The outlook is favourable, but will require sustained efforts to maintain prudent policies and advance structural reforms to support the authorities' medium-term objective of inclusive growth and job creation," said David Lipton, the IMF first deputy managing director.
He said "reform of energy subsidies is critical for achieving the program's fiscal objectives", and to keep government debt on a downward trajectory.
And authorities will need to implement tax reforms and modernize tax and customs administration to free investment in other areas.
Since the 2011 revolt toppled former president Hosni Mubarak, the economy of the Arab world's most populous country has received multiple shocks caused by political instability and security issues.
The IMF said Egypt's economy is expected to grow 4.2 per cent this year, well above initial estimates, while the inflation rate, which exceeded 33 per cent in August, is declining and is expected to fall to 13 per cent by the end of 2018.
