By Islam Serour
The International Monetary Fund’s (IMF) managing director, Christine Lagarde, arrives in Cairo today for a scheduled meeting with the Egyptian Prime Minister Hesham Qandil and the cabinet’s “economic group” for further discussions over the economic and social reform programme prepared by the government. After meeting with cabinet, Lagrade will meet President Mohamed Morsy.
Minister of Finance Momtaz el-Saeed told the state-run Al-Ahram newspaper that the reforms programme to be presented to the IMF is a 100 percent Egyptian one, with an emphasis on social justice. Al-saeed indicated that new regulations for delivering subsidies should be introduced to ensure that they reach those people in the most need.
In his speech to the congregation in Omar Ibn Abdel Aziz mosque, President Morsy stressed that development should come from within, as “those foreign donors do not provide their assistance free of charge.”
Al-Saeed confirmed that the Egyptian government would be officially requesting to increase the amount of the loan to $4.8 billion, to help the Egyptian government address the budget deficit and rescue the country’s ailing economy.
The budget deficit was aggravated during the first half 2012, climbing to EGP 135 billion due to the decline in foreign investments and the shrinkage of tax revenues. Foreign currency reserves dramatically plummeted to reach $14.4 billion during the same period.
The impact of the loan on the national debt is limited and under control, according to the Finance Minister. Angus Blair, financial expert and Chairman of the Segnet institute, agreed with El-Saeed, stating “it should be noted that Egypt’s total external government debt to GDP is 12.8 percent, a rate which is low and unsustainable, compared to many other countries.”