A spokesman for the IMF mission currently visiting Cairo said that the mission is not currently discussing new loans to the country. It is simply a fact-finding mission to assess the economic situation and determine the needs of the country at the current juncture.
As to his expectation about the growth of the Egyptian economy for this year and next year, the spokesman said that the weakness of the international economy will add a new burden on the Egyptian economy in terms of exports, revenues from tourism, money transfers by overseas Egyptians and the flow of foreign investment.
Egypt is eligible, under the quota system, to borrow as much as $3 billion from the Fund but that amount could be raised to $8-$9 billion if the country would be in need.
The Egyptian government has announced earlier this year that its budget deficit will be 28 million pounds ($4.6 billion) on top of interest payments on government borrowing of 106 billion pounds ($17.4 billion), bringing the total deficit to 134 billion pounds (22 billion) or the equivalent of 8.6% of gross domestic product. The government plans to cover the deficit through domestic borrowing of 120 billion pounds ($19.7 billion) and with loans and grants from Arab countries valued at $2.3 billion.
According to the minister of finance Hazem al-Biblawi government subsidies have skyrocketed from one billion Egyptian pounds in 1991 to 95 billion pounds this year.
Source: Al-Sharq Al-Awsat, London, October 26, 2011