Egypt finishes revising economic plan needed for IMF loan

Egypt has finished revising an economic reform plan needed for getting a rescue loan of 4.8 billion U.S. dollars from the International Monetary Fund (IMF), local media reported Thursday, quoting Egypt's Prime Minister Hesham Qandil. "The newly-modified economic reform program has been finished. It was the output of amendments to the first program that was 100 percent based on the recommendations of the national dialogue attended by seven neutral groups," Qandil said in an interview with Egyptian CBC channel Wednesday evening. Qandil said the government communicated regularly via emails with the IMF, stressing the economic reforms in the program were " extremely important." The Egyptian government signed in November of 2012 a preliminary agreement for the loan, but the final conclusion of the deal was delayed due to Egypt's political instability that interrupted some economic measures urgent for completing the deal. The Central Bank of Egypt (CBE) stated earlier this month that the foreign fund reserves declined by 1.4 billion dollars in January 2013 to 13.6 billion dollars, while it warned towards the end of 2012 that the country's foreign currency reserves were 15.1 billion dollars, describing it as "a minimum, critical level." The foreign cash reserves in Egypt were 36 billion dollars in January 2011, the CBE said, indicating that the country has lost around 22.4 billion dollars of foreign currency reserves over the past two years. The country is currently struggling to survive a severe financial crisis triggered by two years of instability following the upheaval in early 2011 that ousted former President Hosni Mubarak. It is now facing a 42-percent budget deficit, which is expected to vary between 30 billion and 32.5 billion dollars by the end of the fiscal year 2012/2013, according to a previous statement of the prime minister. The IMF loan is an attempt to overcome the crisis and boost the economy suffering from budget deficit and declining foreign currency reserves. While some economic experts believe that the IMF loan could help Egypt survive the economic hardship and restore the world's confidence in the country's economy, others hold that this loan represents pressure on the Egyptian leadership that will have to raise prices and impose extra taxes. On Wednesday, the Cabinet approved a draft law proposed by President Mohamed Morsi which might save huge amounts of foreign currencies. The law provided an increase on the custom tariffs imposed on 100 non-basic commodities such as watches, sunglasses, accessories.