Bloomberg News

Egypt Didn’t Request Loan During IMF’s Visit, Minister Says

November 07, 2011

(Updates with IMF comment in final paragraph.)

Nov. 4 (Bloomberg) -- Egypt didn’t ask for a loan from the International Monetary Fund during a visit to Cairo this week by an IMF mission, Finance Minister Hazem El Beblawi said today in a phone interview in the capital.

“So far no request has been made to receive any facility,” he said. “Everything is being studied” and “no decision has been made yet.” Last month, El Beblawi said Egypt had an “urgent need for liquidity” to help finance the budget deficit.

After narrowing the budget-deficit target for this fiscal year to 8.6 percent of gross domestic product in June, Egypt said it didn’t immediately need a $3 billion IMF loan agreed to earlier that month.

Egypt’s economy is struggling to recover from the aftermath of this year’s revolt, as tourists shun the country and strikes curb factory output. GDP grew 1.8 percent in the fiscal year that ended in June, compared with 5.1 percent in the previous 12 months, according to government figures. The country’s international reserves fell for a 10th month in October to $22.1 billion, the central bank said yesterday.

“Egypt’s medium-term economic potential is promising,” Ratna Sahay, the IMF’s deputy director of the Middle East and Central Asia Department and head of the mission in Egypt, said in a statement yesterday, the last day of the visit. “However, maintaining macroeconomic stability and social cohesion amidst modest short-term growth prospects and a weakening external environment remains challenging.”

--Editors: Heather Langan, Karl Maier

To contact the reporter on this story: Mariam Fam in Cairo at mfam1@bloomberg.net.

To contact the editor responsible for this story: Louis Meixler at lmeixler@bloomberg.net.


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