Principled Agreement on IMF Loan

Dr. Ashraf el Arabi, the Minister of Planning and International Cooperation said on 6/4/2013 that talks, which are currently underway with the technical mission of the International Monetary Fund (IMF), are positively welcomed and supported. He expected that a preliminary agreement with the IMF will be reached with the IMF mission in the coming two weeks, in preparation for raising this agreement before the IMF board of directors.

Under this agreement, he said the first tranche of the $ 4.8 billion loan will be offered to Egypt to fill the financing gap. He indicated that the loan could be increased in the light of the registered budget deficit.

El Arabi said the agreement would open the door before Egypt to get soft term aid and loans to redress the financing gap which amounts 20 billion dollars until the end of June 2015.

He said the agreement will also enhance confidence in investment climate, facilitate the flow of foreign and reactivate tourism adding a number of financial corporations and states have pledged to offer a financing package following the signing of the agreement with the IMF.

He said talks will be completed on getting this assistance on the sidelines of the periodical meetings of the IMF and the World Bank in Washington on April 19.

El Arabi said Egypt may not need to withdraw the available soft term loan if tourist movement and investment recovered and growth rate rose. The Minister of Planning said the implementation of the national reform program has become inevitable as exiting economic conditions cannot continue.

El Arabi, at the inauguration of the annual conference of the Faculty of Economics and Political Sciences, has referred to some positive development in performance in spite of economic challenges topped by the inclusion of 400,000 persons in actual posts in the private sector during the past eight months. He referred to an agreement with Iraqi officials on the transfer of 60 million dollars worth of pensions of the Egyptians working in Iraq. He said an agreement was reached on the dues and debts owed to Egypt by Iraq which are valued at 1,3 billion dollars which the Iraqi government will settle through the Paris Club whereas the Egyptian government believes it could he settled through a bilateral framework.

On his part, Eng. Hatem Saleh, the Minister of Trade and Industry said there is a tangible movement in the sector of industry as licenses have been awarded for the establishment of 600 new factories. He said licenses for establishing 11 new cement plants have been offered. He expected that exports of industrial products and commodities would achieve a big bounce after the exchange rate had been streamlined and dollar exchange rate upped. He said revenue of industrial exports would exceed 24 billion dollars this year to maintain its place as the first source of foreign exchange in national economy.