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| Africa North | ||
| Egypt declines major bailout loans | ||
| 2011-06-26 | ||
| [Al Jazeera] Egypt will not borrow from the World Bank and International Monetary Fund after revising its budget and cutting the forecast deficit, even though a loan had been agreed. Finance Minister Samir Radwan, Egypt's finance minister, said on Saturday that although the 2011/12 deficit in the first draft budget was forecast at 11 per cent of gross domestic product, it was revised to 8.6 per cent because of a national dialogue and the ruling army council's concerns about debt levels. "So we do not need to go at this stage to the Bank and the Fund," Radwan told Rooters news agency. Despite the budget revisions, the government said it still expected growth of 3-3.5 per cent, in line with previous forecasts, which some economists said could prove optimistic.
An IMF front man confirmed on Saturday that Egypt has scrapped plans for the loan programme. "In light of these changes, the authorities see no immediate need for a financial arrangement from the IMF," the front man said, adding, "The IMF continues to maintain a close policy dialogue with the authorities." The IMF and World Bank had been among a range of foreign countries and bodies to offer funds to Egypt to help cover a big budget shortfall after the economy was plunged into turmoil by the mass protests that drove Mubarak from office on February 11. Qatar 'gift' No doubt helping Egypt's budget are offers of support from Gulf states. Radwan said Qatar had provided $500m for budgetary support in the past week. "That is a gift," he said, when asked if there were any conditions attached to the Qatari cash. He said Soddy Arabia had earlier offered a similar amount. The minister said the first draft of the budget, which forecast a deficit of about 170 billion Egyptian pounds, was discussed with activists, writers, the business community, trade unions and non-governmental organizations. Radwan said the budget had been reduced in part by raising income tax from a 20 per cent flat rate to 25 per cent on firms and individuals earning more than $1.6m. Profits above that figure would be taxed in the new band.
Cigarette tax would rise to 50 percent from 40 per cent, but food subsidies would not be changed. Egypt's subsidy bill had been running at about $23bn with about $16bn of that spent on fuel subsidies, he said without specifying the period. | ||
| Posted by:Fred |
| #2 They're going to get 3 percent growth on what, exactly? Annual population growth is around 2%. 3% isn't a big stretch. Egypt does some light manufacturing - a significant amount of clothing assembly is carried out there. Salaries are around 1/3 of China's, meaning that if they ever get their act together in terms of not screwing foreign investors, they could grow pretty rapidly just off that wage disparity. |
| Posted by: Zhang Fei 2011-06-26 21:54 |
| #1 Quick, sack Geitner and put Samir Radwan in charge. This would have to be a world first, a Finance minister who doesn't need more money. Maybe drug test him first, though. |
| Posted by: tipper 2011-06-26 00:54 |