Egypt optimistic about economy after IMF loan approval: PM

There is an atmosphere of optimism about the Egyptian economy as the International Monetary Fund (IMF) has approved a 12 billion U.S. dollars loan to Egypt and Standard and Poors has revised its sovereign credit outlook from “negative” to “stable,” Egyptian prime minister said at an economic conference on Saturday.

“We also expect an improvement of Egypt’s credit rating by other international financial institutions in the near future,” Prime Minister Sherif Ismail said in the first session of the three-day conference, attended by several ministers as well as hundreds of economists and businessmen.

Egypt has been suffering sharp economic recessions resulting from the past five years of political turmoil, which led to a budget deficit of over 21.3 billion dollars representing 12.2 percent of the gross domestic product (GDP), a gross debt that almost equals the country’s GDP, including 55.8 billion dollars of foreign debts, and an unemployment rate that hits 12.5 percent, according to the prime minister.

“We seek to reduce the general gross debt to be 85-90 percent of the GDP, as it increased from 79 percent in the 2009/2010 fiscal year to about 95-100 percent in the general budget of the current fiscal year, which is a serious indicator,” he explained.

The country resorted to the IMF loan to finance the budget deficit through a strict economic reform program including cutting fuel and energy subsidies that burden the country’s budget.

Ismail said that the government has provided a social security network to support the poor to endure the economic reform and it seeks to gradually deliver the subsidies to citizens to make sure they go to the rightful beneficiaries.

He added that the government also plans to expand the Solidarity and Dignity social subvention program to target 1.7 million families with an additional cost of about 2.5 billion Egyptian pounds (over 150 million U.S. dollars).

Under the theme of “Egypt Future Road: Start and Challenges,” the third annual economic conference aims to provide a platform for officials, investors and economists to discuss the country’s economic future.

Source: Xinhua