Egypt in talks with IMF on up to $4 bln loan

Egypt in talks with IMF on up to $4 bln loan

Egypt also seeks more funds from Kuwait development fund; FinMin sees economic growth doubling next year

April 27, 2011 4:02 by Reuters

Egypt’s government is in talks with the International Monetary Fund for an up to $4 billion loan, and the country’s economic growth should double next year, Finance Minister Samir Radwan said on Tuesday.

In all, Egypt has said it is seeking $10 billion in funding from international lenders and rich nations to cope with the fallout from the mass protests that toppled the country’s long-time leader in February.

“We are still negotiating a loan with the IMF for $3 to $4 billion,” Radwan told reporters after a meeting at Kuwait’s Chamber of Commerce and Industry.

He also said Egypt was seeking to increase its share of loans from the Kuwait Fund for Arab Economic Development by $100 million from the current $200 million.

The IMF head said earlier this month the fund would likely make available $35 billion in loans to oil-importing countries in the Middle East and North Africa where popular uprisings have occurred.

Anti-government protests fuelled by soaring prices, unemployment and repression brought much of Egypt’s economy to its knees for nearly three weeks until President Hosni Mubarak, the country’s ruler for 30 years, resigned on Feb. 11.

A collapse in tourism and foreign investment have hit revenues hard.

“Economic growth is unfortunately going down. Our estimate is 2 percent this year … next year it is about 4 percent,” he told journalists in Kuwait.

He did not say whether he was referring to the fiscal or calendar year.

The economy contracted by an estimated 7 percent in January-March and was expected to grow by 2 percent in the current fiscal year to June, a newspaper quoted Radwan as saying last week.

Egypt’s budget deficit may top 10 percent of gross domestic product in the coming fiscal year as the government responds to demands for jobs and higher wages, Radwan said in the Saudi capital late on Monday.

(Reporting by Eman Goma; Writing by Martin Dokoupil; Editing by John Stonestreet)