Egypt's net foreign reserves are currently enough to cover only three months of the country's imports, Ashraf El-Arabi, minister of planning and international cooperation, stated on Tuesday.
Earlier the same day, the Central Bank of Egypt (CBE) announced that Egypt's total foreign reserves had dropped by $1.4 billion in January to reach their lowest levels – $13.6 billion – in more than a decade.
The government pays roughly LE5 billion (roughly $746 million) per month on imports, El-Arabi said in a speech at Cairo’s International Book Fair.
According to CBE figures, Egypt’s total import bill in 2012 stood at $58.6 billion.
El-Arabi called on the government to set an "urgent plan" aimed at easing the state's widening budget deficit and raising foreign reserve levels by June of this year.
He went on to point out that talks between Egypt and the International Monetary Fund over a proposed $4.8 billion loan were currently on hold until the government modified its economic reform programme.
"Egypt's decreasing foreign reserve levels raise serious concerns about the country's fiscal situation," former finance minister Hazem El-Beblawi told Ahram Online.
"As long as the government fails to set limits on needless imports, it will be unable to equalise its balance of payments," added El-Beblawi.
Economists put Egypt's total luxury imports at roughly $4 billion per year.
"I can't say we're on the brink of collapse, but the real problem is that Egypt lacks the domestic resources that would allow the government to deal with anticipated shortfalls," he said.
El-Beblawi went on to say that the proposed IMF loan would help restore the CBE's dwindling foreign reserves and offset the government's widening budget deficit.