Egypt to Get IMF Loan by Oct

Egyptian Prime Minister Hisham Qandil has said he hopes to complete loan negotiations with the International Monetary Fund (IMF) at meetings in Cairo in late October. Finance Minister Momtaz El-Said, however, has said he expects a deal to be cut with the IMF two weeks after the October visit. Both remarks were made during the Euromoney conference held in Cairo. Egypt has launched negotiations for a $4.8 billion IMF loan, but has also indicated it may ask for more. The country urgently needs support to prop up state coffers weakened by turmoil since last year's popular uprising which ousted President Hosni Mubarak.

Qandil also said that the government aimed for 4 per cent growth in the 2012/13 fiscal year, compared to previous forecast of 4 to 4.5 per cent, and said a five-year plan envisaged hitting an annual growth rate of 7.5 per cent. "We are negotiating with the IMF. Our people are travelling to Tokyo to attend the joint IMF/World Bank meeting this week," Qandil told a conference. "They are inviting the IMF to come for official negotiations by the end of this month. We are hoping to reach an agreement by that time," Qandil said.

The IMF wants Egypt to put a programme in place to narrow a budget deficit that has mushroomed to 11 per cent of gross domestic product since the uprising. Egypt has said it is working on its programme but insists it will be "home grown." One part of that programme is likely to be a restructuring of subsidies on petroleum products, which eat up about 25 per cent of total government spending. Analysts say measures to reduce energy subsidies are certain to be unpopular among many Egyptians, some of whom joined the uprising last year because of economic grievances. Qandil has previously said that a series of measures are needed to ensure that subsidies reach those who deserve them most.