Additional Economic Reforms From Egypt Still Needed: IMF Official

The International Monetary Fund (IMF) will suggest additional economic reforms as part of its conditions for granting Egypt a $4.8 billion loan, an IMF official told Ahram’s Arabic news website on Tuesday.

An IMF delegation arrived in Cairo on Tuesday, where it is due to resume talks with the Egyptian government on the financial rescue package.

Speaking on the phone from Washington D.C., the official disclosed that the fund had reservations about the revised economic reform programme, which it deemed insufficient to enable the loan to salvage the country’s faltering economy.

Last month, the Egyptian government presented an economic programme to the IMF which involved more gradual measures to tackle Egypt’s budget deficit than the programme it had presented to the fund during negotiations last November.

The anonymous source specified that although the additional measures required by the IMF would ultimately be determined by Egypt, they must involve further restructuring of Egypt’s subsidies while at the same time strengthening social security coverage for the poorer segments of Egyptian society, who will be hardest hit by the subsidy cuts, so as to make the reforms viable.

The IMF will also encourage Egypt to accept a $750 million emergency loan, which the country had previously refused, according to the source.

The source added that the fund was skeptical about the Egyptian government’s ability to implement the necessary economic reforms before Egypt’s legislative elections.

Egypt’s President Mohamed Morsi had stated in March that he expected elections for Egypt’s lower house of parliament to begin in October.