The International Monetary Fund’s Next Step in Egypt
A government spokesperson said that an International Monetary Fund (NYSE:IMF) delegation will arrive on Wednesday in Cairo for talks with the government. This is a development since the country looks to conclude a deal that will help with the economic crisis it is facing.
The spokesman stated that the country would not seek any emergency loan from the Fund and did not have a crisis when it came to importing essential commodities.
After the two years of economic upheaval it has experienced, the country has been trying to get a loan to help deal with some problems. At the same time, it is trying to reassure the public that it has the essential commodities its needs, including wheat.
Although the government of President Muhammed Mursi started a deal with the IMF last November, but it was postponed from ratification in December. The postponement was due to political debate over the extent of the President’s powers.
The IMF has stated it will continue to discuss the possibility of financial aid to Egypt. Regardless of what kind of deal it might make, the IMF would likely require the country to make austerity cuts. Egypt is currently dealing shortages in fuel subsidies and is trying to cutback on these subsidies.
Another part of the problem is the drop in tourism as a result of the unrest the country has experienced over the last two years. Considering the tourism accounted for ten percent of the GDP before the problems. Tourism is slowly starting to increase, which is necessary for Egypt’s economy to continue to improve. The meting with the IMF and government will likely affect the next steps the government takes.