Egypt turns down IMF, World Bank loans

Cairo,(IANS): Egypt has declined to take loans from the World Bank and International Monetary Fund (IMF) presently, following cuts in budget deficit, Xinhua reported.

‘Egypt doesn’t need any loans from IMF or WB (World Bank) in the current time,’ Egyptian Finance Minister Samir Radwan said in a statement.

The statement came after Egyptian government cut the budge deficit for the fiscal year of 2011 to 2012, starting from July 1, from 170 billion Egyptian pounds ($28.5 billion) to 134.3 billion pounds ($22.5 billion). It accounts for 8.6 percent of gross domestic product (GDP), down from the earlier estimated 10.75 percent.

Egyptian government approved the amended budget for the fiscal year 2011 to 2012 June 22, which set the total public spending at 490.6 billion pounds, down from 514.5 billion pounds when the budget draft was first announced June 1.

Earlier this month, Egypt had announced the IMF was to grant it a three billion dollars loan over 12 months for next fiscal year at 1.5 percent annual interest rate to promote the Egyptian economy, especially to decrease the country’s budget deficit.

Radwan said in the statement the deficit could be covered via local markets, some grants and aids from friendly countries and international organisations.

Egypt’s economic condition has been deteriorating since the mass protests, which caused damage of the tourism sector and other industries, besides retreat of foreign investments.