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Tue 8 Jan 2013 10:59 AM

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IMF committed to helping Egypt face challenges

Masood was visiting Egypt for talks over a $4.8bn loan agreement with the IMF

IMF committed to helping Egypt face challenges
Masood Ahmed, Director of the IMFs Middle East and Central Asia Department

The International Monetary Fund said its committed to helping Egypt deal with its economic challenges exacerbated by the country's turbulent political environment since the toppling of Hosni Mubarak's regime in 2011.

"The IMF remains committed to support Egypt in addressing its increasing economic challenges and moving to a more inclusive model of economic growth through a socially-balanced homegrown program," Masood Ahmed, Director of the Middle East and Central Asia Department of the Washington based organization said after meeting Egyptian officials in Cairo yesterday including President Mohamed Morsi.

“I am encouraged by the authorities’ commitment to take steps necessary to achieve fiscal and external sustainability," Ahmed added. "Following our discussions today, and based on the work that is to be carried out, we agreed that an IMF technical team would visit Cairo in the coming weeks to resume discussions on possible IMF financial support."

Masood was visiting Egypt for talks with officials from the North African country regarding negotiations over a $4.8bn loan agreement with the IMF that was frozen in December. Egypt had requested the loan to help it bridge gaps in its fiscal deficit this year.

Masood said Egyptian officials had "expressed their firm commitment to articulate and implement a homegrown macroeconomic program that enjoys broad support and addresses these challenges," adding they had also "reiterated their request for financial support from the IMF for such a program."

Egypt has been marred by political and social upheaval that has seen unemployment rise to above 12 percent, tourism receipts drop by more than 30 percent, lead to the value of the Egyptian pound plunging more than 6 percent and the central bank's foreign currency reserves plummeting 58 percent in two years to $15bn, enough to cover only three months of imports for the country.

Morsi carried out a shuffle on Sunday bringing in 10 new ministers including new finance minister Al-Mursi Hegazy, who Masood met with.

The North African country's economy is projected to expand 3 percent in 2013 from 2 percent a year, according to the IMF. Inflations is estimated to increase to 10.7 percent this year from 8.6 percent in 2012.