* President to review economic plan on Tuesday
* Subsidy on 95-octane fuel to be removed this week
* Egypt needs to plug budget, balance of payments gaps
By Patrick Werr
CAIRO, Nov 12 The Egyptian government expects to
sign a memorandum of understanding with the International
Monetary Fund for a $4.8 billion loan before an IMF negotiating
team leaves Cairo on Wednesday, Finance Minister Mumtaz al-Said
The government also plans to eliminate a gasoline subsidy
effective Wednesday or Thursday, he said, a move that suggests
the government wants to show it is taking active steps to close
Egypt has been drawing up an economic reform plan in part to
help convince the IMF it is serious about economic reform.
Analysts say the IMF usually requires that governments take
active measures before signing off on loans.
"We will sign a preliminary memorandum of understanding
before they leave," the minister told Reuters by telephone,
adding that the team would remain in Egypt until Wednesday.
The government wants the $4.8 billion IMF loan to help it
narrow a budget deficit running at 11 percent of gross domestic
product and a balance of payments deficit that has gobbled up
more than $20 billion of its foreign reserves since the uprising
that toppled Hosni Mubarak in February 2011.
An IMF spokeswoman had no immediate comment.
Several dozen people protested against the IMF on Monday in
front of the stock exchange in central Cairo, and a trade union
group said in an emailed statement it opposed to the loan
because few details had been released, there had been no public
discussion and the loan was not directed specifically to social
and economic development.
Egypt's cabinet will meet with President Mohamed Mursi on
Tuesday to review the government's "comprehensive development
plan", Prime Minister Hisham Kandil said on his Facebook page.
The meeting would be followed by a news conference, he added.
No economic plan has yet been released to the public. But
government officials have outlined a range of proposed measures
such as cutting back on fuel subsidies, raising the sales tax on
goods and services and taxing IPOs on the stock exchange.
Leaks to Egyptian media are seen as an effort to prepare the
public for steps that are certain to be unpopular.
Among the measures reported in recent days are raising the
price of natural gas piped to homes as of next month and a one
percentage point increase in sales tax to 11 percent.
The government is also proposing higher taxes on telephone
use and purchases of passenger cars, cigarettes and tobacco,
beer and alcoholic drinks, non-alcoholic beer, carbonated
mineral water, coffee beans and water-resistant cement.
Drivers pay 2.75 Egyptian pounds ($0.45) a litre for
95-octane fuel, well below the international price. The price of
lower octane fuel used more widely by the poor will remain
unchanged for the time being, officials have said.