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UPDATE 1-Economic impact from Egypt protests unclear - IMF
February 3, 2011 / 5:44 PM / in 7 years

UPDATE 1-Economic impact from Egypt protests unclear - IMF

(Recasts; adds quotes, background)

WASHINGTON, Feb 3 (Reuters) - The International Monetary Fund on Thursday said it was too early to know what impact violent protests in Egypt will have on the economy and neighboring countries, but the IMF was ready to offer advice once the situation calmed.

“We just don’t know yet how the economic situation will develop because it is not yet clear how the political situation will develop,” IMF spokeswoman Caroline Atkinson told a regular news briefing.

“There is an issue of who is in charge of what now,” she added.

Egypt has announced it will reopen banks on Sunday after a week-long closure and there are fears of a run on banks. The central bank said on Thursday it would limit cash withdrawals by individuals but allow unlimited transfers abroad. For details, see [ID:nLDE7121YO]

Atkinson said the IMF stood ready to help Egypt with economic advice once the situation had stabilized.

The fund has long warned about high unemployment rates among youths in the Middle East and Atkinson said this was an important challenge for any government in Egypt.

The IMF completed a regular review of Egypt’s economy shortly before protesters took to the streets demanding an end to 30 years of rule by President Hosni Mubarak.

During the review, the IMF had focused on the need for “broad-based and inclusive growth,” and measures to tackle unemployment, Atkinson said.

World Bank President Robert Zoellick said in an interview with Reuters on Wednesday that countries such as Egypt had to deal with the problem of “partial modernization” of their economies, in which the political system did not allow the masses to benefit from economic reforms. [ID:nN02240440]

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