Egypt says has up to $12 bln funding gap-IMF

Egypt says has up to $12 bln funding gap-IMF

Talks but no formal request for IMF loan; IMF says no takers yet for $35 bln oil importer fund

April 27, 2011 3:00 by p.deleon

Egypt has indicated it needs up to $12 billion to meet a funding gap but has yet to formally request a loan from the International Monetary Fund, an IMF official said on Wednesday.

“At this stage what we know is that the Egyptian authorities have indicated that they have a financing gap of $10 (billion) to $12 billion,” Masood Ahmed, the IMF’s director for Middle East and Central Asia, told Reuters.

“Our own analysis for this suggests that is probably right,” he said after a presentation of its regional economic outlook.

Egypt has said it was 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 Hosni Mubarak in February.

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.

Ahmed said on Wednesday no country has formally approached the fund for a financial assistance, including Egypt.

“At this stage, even Egypt has not asked us for money. Just to be clear, we have not received a request from Egypt yet for financing. But at this stage we really don’t have a sense of how much that amount will be,” he said.

Egyptian Finance Minister Samir Radwan said in Kuwait on Tuesday that his government was in talks with the IMF for an up to $4 billion loan.

A collapse in tourism and foreign investment following the protests have hit revenues hard and sent the economy of the most populous Arab country into an estimated 7 percent contraction in January-March.

The IMF projects Egypt’s economic growth to plunge to 1.0 percent this year, well below its long-term average, after a 5.1 percent expansion in 2010, the regional report showed.

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 earlier this week.

By Martin Dokoupil and Martina Fuchs

(Reporting by Martin Dokoupil and Martina Fuchs; Editing by Toby Chopra)