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IMF lending still open to Egypt: official

Funding is still an option in future despite military rulers rejection of $3 billion in June, says global body as it forecasts growth of 1.8 per cent for the present fiscal year

Ahram Online, Tuesday 13 Sep 2011
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IMF door is always open, says spokesman (Photo: Reuters)
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The IMF remains willing to lend money to Egypt if Cairo changes its mind and asks for assistance, a senior official of the global lender said on Monday.

Egypt's military rulers turned down an offer of US$3 billion from the IMF in June, vowing to fund their budget deficit with domestic resources and loans from wealthy Arab governments.
 
"If in coming months they find that their financing needs are such that they want to look again at external sources including the IMF, the IMF is there for Egypt as it is for all its members," Masood Ahmed, director of the Fund's Middle East and Central Asia department, said in an interview with Reuters. 
 
Some analysts foresee Cairo struggling to finance the deficit under its current plan, especially if the domestic debt market has trouble absorbing a large amount of government paper or the global economic slowdown hurts Egypt's growth and tax revenues.
 
Ahmed said the IMF was encouraged by some economic policy changes planned by the Egyptian government, including reforms to its subsidy system that improve the distribution of cooking gas to poor people, and moves to raise prices paid to farmers for their crops.
 
In a report presented to G8 finance ministers in Marseille on Saturday, the IMF predicted Egypt's gross domestic product would grow 1.8 per cent in the fiscal year through June 2012, only slightly faster than the 1.2 per cent growth of the last fiscal year, when the economy was hit by the unrest which overthrew Hosni Mubarak.
 
Growth is projected at 4.0 percent in 2012/13.
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