Egypt needs austerity to rein in budget deficit: Prime Minister

Ahram Online, Monday 12 Dec 2011

Ganzouri says new revenue streams are needed and an IMF loan is still a possibility, during Sunday's televised speech

Kamal El-Ganzouri
Egypt's new Prime Minister Kamal Ganzouri speaking at an earlier news conference (Photo: Reuters)

The prime minister told Egyptians on Sunday that the economic situation was worse than anyone imagined and that there was a need for austerity to rein in the burgeoning budget deficit.

In a speech broadcast on Egyptian state TV, Kamal El-Ganzouri said re-establishing security would be a priority for the "national salvation government" that he unveiled last week.
He described the last decade of President Mubarak’s 30-year rule as full of policy failings.
Ganzouri said the government would not agree to a US$3.2 billion facility from the International Monetary Fund (IMF) until the outlook for the budget was clearer.
"If we are forced to resort to the IMF, we will resort to it. This is a matter open for discussion," he said
"To save LE 20 billion there has to be austerity, but in sectors that we feel do not affect the Egyptian citizen. I want to reduce this [budget deficit[, because the deficit remaining as it is means there will be inflation," he said.
Soaring prices were among the political and economic factors that drove people on to the streets to oust Mubarak, and have ticked up again.
"We must create new revenue and reduce the burden on citizens," Ganzouri said.
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