CAIRO Dec 11 Egypt has agreed with the
International Monetary Fund to delay a $4.8 billion loan that
was due to be approved in December after linked economic
belt-tightening steps were suspended, the finance minister said
The deal delay, which will be a blow to the government as it
was seen as vital to reassuring investors and donors about the
country's economic plans, followed a move to suspend planned tax
increases that were criticised by the opposition.
The IMF board was scheduled to meet to discuss approving the
loan on Dec. 19 after a preliminary agreement was reached during
a visit by an IMF team to Cairo last month. The IMF had said
Egypt must keep policy steady for the loan to go through.
"Of course the delay will have some economic impact but we
are discussing necessary measures (to address that) during the
coming period," Finance Minister Mumtaz al-Said told Reuters,
after saying the IMF board was now expected to meet in January.
"I am optimistic ... everything will be well, God willing,"
he said by telephone.
He said the delay would give officials time to explain an
economic reform package after media criticism prompted the
government to postpone measures that were part of the programme.
Opposition groups, locked in a battle with the government
over a constitutional referendum scheduled for Saturday, began
attacking the tax increases on social media immediately after
they were published in the official gazette at the weekend.
They included increases on the sales tax on goods and
services that range from alcoholic beverages, cigarettes and
mobile phone calls to automobile licences and quarrying permits.
The taxes are believed to form part of an austerity package
included in a programme the government has presented to the IMF
to secure loan approval, although full details of deal with the
Washington-based institution have not been released.
The government has insisted the changes would not target the
poor. Speaking in a news conference after the minister's
comments, Prime Minister Hisham Kandil said a "national
dialogue" over the tax plans would start next week.