IMF negotiations to resume Wednesday

Cabinet spokesperson Alaa al-Hadidy said the International Monetary Fund delegation will arrive in Cairo on Wednesday to resume negotiations that started in November for a US$4.8 billion loan.

Hadidy told reporters on Sunday that negotiations will not include discussions on emergency loans.

A government source has also said that there are loans that Egypt can obtain from the World Bank, the European Union, and the African Development Bank, but that first the country needs final approval of the IMF loan and for Egypt to gain the trust of donors.

The source, which is close to the negotiations with the IMF, said that the total aid from other international financial institutions that Egypt could obtain was in the $7-8 billion range.

The source added that alternative sources of aid from other Arab countries, including Iraq and Libya, would be a temporary solution pending a final agreement on the IMF loan.

Egypt began negotiations with the IMF for a loan to stem the economic deterioration that has battered the country since the January 2011 revolution overthrew Hosni Mubarak. The government hopes that the loan can help fill the country’s yawning budget deficit, which is expected to reach LE180 billion by the end of the current fiscal year in mid-2013.

However, the IMF has warned that an economic reform program that includes austerity measures is a necessary condition for the loan.

Edited translation from Al-Masry Al-Youm

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