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Thursday, October 11, 2012

IMF loan deal with Egypt is possible by the middle of November

Christine Lagarde, Chief of IMF, and Mohamed Morsy,
Egypt's President

Christine Lagarde, Chief on International Monetary Fund (IMF), said during the semi-annual meeting of IMF and World Bank in Tokyo that IMF and Egypt could complete the negotiations over the long awaited $ 4.8 billion load for financial support and restoring of Egyptian economy by the middle of November.

The issue of IMF loan is very controversial for Egypt as it met a lot of critics and calls for rejected this loan. Several political parties and also different organizations have been protesting against this loan as they see it as a threat to Egyptian economy. But Egyptian economists consider this loan to be very important for the country’s economy recovery on the current stage as it can help to develop Egyptian economy and to create more comfortable conditions for the international investments. Those investments are really necessary for Egyptian economy as it has been significantly deteriorated after January 25 Revolution and the following transitional period with political instability and constant tensions.

It is worth mentioning that IMF’s Chief Christine Lagarde has already visited Cairo in August 2012 to meet Egyptian President Mohamed Morsy, Prime Minister Hisham Qandeel, Egypt’s Finance Minister Momtaz Al-Saeed and other representatives of the state’s financial sector. They have been discussing the issue of the IMF loan for Egypt and the conditions and terms of the financial support. Special technical team of IMF arrived in Egypt later in September to examine the economical and financial situation in the country and the new economic program and the reforms to implement in the country as well. There was expected that after this visit the negotiations will continue.

Christine Lagarde said on Thursday during her speech at the Tokyo meeting she is confident that the talks over the $ 4.8 billion load for Egypt would be concluded in the middle of November this year. IMF’s Chief also hopes those negotiations will be productive, and the agreement will be reached in order to support Egypt and to help it to restore its economy. In addition to that IMF also forecasts that Egyptian economy’s growth is better than in was expected before with 2% in 2012 which was possible due to easing of some political tensions and uncertainty in the country.

The terms of the agreement are expected during the upcoming talks and a range of timescales for the agreement has been suggested in a last few days.

Egyptian Finance Minister Momtaz Al-Saeed said he is expecting that the talks with IMF over the loan and the deal could be cut during the official visit of IMF delegation to Cairo within the last two weeks of October. Egypt’s Prime Minister Hisham Qandeel in his turn stressed that he has hopes the negotiations will be concluded during the IMF visit itself and the deal will be made.