Egypt wins approval for $12bn loan from the IMF

[خره مينه لګته وي]

Egypt wins approval for $12bn loan from the IMF

• 12 November 2016
  

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Image captionLast week Egypt floated its currency in a move aimed at strengthening confidence in the economy.copyrightGETTY IMAGES

The International Monetary Fund (IMF) has approved a three-year $12bn (€11bn) loan for Egypt to help the country out of its deep economic crisis.

Egypt will receive $2.75bn immediately, with the rest subject to its economic performance and further reforms.

IMF Managing Director Christine Lagarde said the bailout would "address longstanding challenges".

Egypt's President Abdul Fattah al-Sisi is facing high unemployment and a budget deficit of 12% of GDP.

The country has struggled to attract foreign investment since the political turmoil in 2011 and the so-called Arab Spring, which saw former president Hosni Mubarak overthrown.

Tourism - traditionally a leading source of income for Egypt - has declined sharply over the past five years.

Last week Egypt floated its currency in a move that reduced its value by almost 50% against the dollar in an attempt to strengthen confidence in the economy.

• Egypt allows its currency to float freely

• Can Egypt's tourism recover?

The government also increased interest rates by three percentage points to 14.75%, and raised the price of basic commodities and fuel.

The moves led to widespread criticism of the president and a drop in his popularity. A big security operation was put in place in Cairo to pre-empt mass demonstrations that had been expected on Friday.

Image captionThere was heavy security in Cairo on Friday to prevent any unrest over the austerity moves.copyrightREUTERS
Ms Lagarde said the latest "home-grown economic plan" was intended to tackle the country's large budget deficit, low growth and high unemployment rate.

She said that further reforms, such as reductions in fuel subsidies and legislation to reduce Egypt's public sector wage bill, were necessary for the country to move forward.

"Resolute implementation of the policy package is essential to restore investor confidence," Ms Lagarde said.

In 2013, Egypt's first democratically elected president, Mohammed Morsi, was ousted by the military, led by Gen Sisi, after only one year in power.

Mr Sisi was later elected president in May 2014.


bbc

 

[Cyberian]

While rest of the world tries to get loans from wherever possible to develop their nations, in Pakistan people are brainwashed into believing it's some sort of a Jewish trap.

 

[NHUDA]

While rest of the world tries to get loans from wherever possible to develop their nations, in Pakistan people are brainwashed into believing it's some sort of a Jewish trap.

In Pakistan People are not aware of the Actual difference between IMF & World Bank .... Whereas the programmes from both haven't help in forging such devilish image .. which has more to do so our own incompetency & corruption rather than the Programmes itself ..

IMF is a lender which helps in Balance of Payment crises .... while it try to re-structure the structural issues which leads to such problems, our govt, is too incompetent to understand it ... in Past 3 years IMF worked hard tht we do somewhat modification to address our economic issues but as soon the programme was complete , our govt went on another spending spree with no sense of direction.

World bank provide loan for infrastructure development, but while we get the loan we try to use it for something else (as well as our own corruption) and end up with the loan while the thing it was intended for is never been achieved.

Ever political party do the same and then later blame each other and the Samraji taqatain to break the economic back of the country !

And now we ourselves are in such a deep hole tht we take loan to pay back interests and earlier borrowed loan !

So forgive the common Pakistani people if they believe it is a trap (burden) who see the amount coming in but no improvements in thr lives.

 

[Cyberian]

In Pakistan People are not aware of the Actual difference between IMF & World Bank .... Whereas the programmes from both haven't help in forging such devilish image .. which has more to do so our own incompetency & corruption rather than the Programmes itself ..

IMF is a lender which helps in Balance of Payment crises .... while it try to re-structure the structural issues which leads to such problems, our govt, is too incompetent to understand it ... in Past 3 years IMF worked hard tht we do somewhat modification to address our economic issues but as soon the programme was complete , our govt went on another spending spree with no sense of direction.

World bank provide loan for infrastructure development, but while we get the loan we try to use it for something else (as well as our own corruption) and end up with the loan while the thing it was intended for is never been achieved.

Ever political party do the same and then later blame each other and the Samraji taqatain to break the economic back of the country !

And now we ourselves are in such a deep hole tht we take loan to pay back interests and earlier borrowed loan !

So forgive the common Pakistani people if they believe it is a trap (burden) who see the amount coming in but no improvements in thr lives.

What on earth are you talking about? Pakistan's stock market is now worth around $100 billion from a mere peanuts a decade ago.

For you rinformation, in 1999 Pakistan was ranked as the 39th largest economy, after the military dictatorship ended, it was down to the 49th position. However, under the current Government it's finally back to the 39th position with the Nominal GDP valued at $270 billion.

Have some sense before you start spreading your anti-Pakistani propaganda.

 

[NHUDA]

What on earth are you talking about? Pakistan's stock market is now worth around $100 billion from a mere peanuts a decade ago.

For you rinformation, in 1999 Pakistan was ranked as the 39th largest economy, after the military dictatorship ended, it was down to the 49th position. However, under the current Government it's finally back to the 39th position with the Nominal GDP valued at $270 billion.

Have some sense before you start spreading your anti-Pakistani propaganda.

First of All you completely lost the Point i was making ... i.e. trying to explain why general populous think about this scheme as they do (regardless of Practical reasoning).

Secondly, i m not against the Plans (borrowings) itself .. i am against thr misuse ...
Read this
http://www.dawn.com/news/1232800/what-has-the-imf-programme-achieved

Secondly enlighten Me how come an IMF or World Bank Plan is the reason (sole or major) to boost the Stock Market ... and per say Stock market an indicator of improving economy !

As for the GDP the Rank is a Relative Term, at times even if u do not falter, Rank goes down coz others fare better, i understand the past couple of years are better thn the 5 years before tht (PPP rule) ... but i will suggest you to have a look into the GDP growth rate to understand the actual trajectory.

Which Again i need you to tell me how come is the IMF or World Bank doing!

 

[500]

Great now they can buy three more aircraft carriers.

 

[Clutch]

12billion only?... ha , ha... we Pakistanis use 12billion $ loans as toilet paper.

Come back when you are in the trillions, Egypt!...

Ha, ha,...

BTW. Sarcasm alert.

 

[Cyberian]

First of All you completely lost the Point i was making ... i.e. trying to explain why general populous think about this scheme as they do (regardless of Practical reasoning).

Secondly, i m not against the Plans (borrowings) itself .. i am against thr misuse ...
Read this
http://www.dawn.com/news/1232800/what-has-the-imf-programme-achieved

Secondly enlighten Me how come an IMF or World Bank Plan is the reason (sole or major) to boost the Stock Market ... and per say Stock market an indicator of improving economy !

As for the GDP the Rank is a Relative Term, at times even if u do not falter, Rank goes down coz others fare better, i understand the past couple of years are better thn the 5 years before tht (PPP rule) ... but i will suggest you to have a look into the GDP growth rate to understand the actual trajectory.

Which Again i need you to tell me how come is the IMF or World Bank doing!

Bahi Sahib, keep your head buried in the toilet as I can't be bothered to waste my time splitting hair for you.

And while you're at it (reading my post), question yourself how come the dollarised military could not claw back the billions between 1999-2007 they accused others of being misused and siphoned by the politicians they toppled.

 

[flamer84]

Egypt's President Abdul Fattah al-Sisi is facing high unemployment and a budget deficit of 12% of GDP

LOL .....And they buy weapons with billions of $ !

(because this means they actually have to borrow 39 billion $/year just to balance their budget)

 

[Frogman]

LOL .....And they buy weapons with billions of $ !

(because this means they actually have to borrow 39 billion $/year just to balance their budget)

Take into account that the military budget isn't even 2% of Egypt's GDP and that Armed Forces procurements traditionally occur over five year cycles which means that the total spend is relatively insignificant.

The loan itself means we're on the right track in terms of economic reform and bouncing back after five years of political crisis.

 

[flamer84]

Military budget isn't even 2% of Egypt's GDP and that Armed Forces procurements traditionally occur over five year cycles.

That might be so but when you have 12% of GDP budget deficit....

Dude,as I've said,you need to borrow 39 billion $ just to balance the yearly budget! You're digging an enourmous hole for the entire country.

 

[Frogman]

That might be so but when you have 12% of GDP budget deficit....

Dude,as I've said,you need to borrow 39 billion $ just to balance the yearly budget! You're digging an enourmous hole for the entire country.

The Armed Forces allocation is six (6) percent of the annual budget. The real problem is the amount spent on universal subsidies and public wages. Those are the vaccums and both are being cut and restructed as per the 2014 reform program. Without these reforms the IMF would not have approved the loan.

For once in a long time the general outlook is positive due to changes and reforms by the current administration.

 

[flamer84]

The Armed Forces allocation is six (6) percent of the annual budget. The real problem is the amount spent on universal subsidies and public wages. Those are the vaccums and both are being cut and restructed as per the 2014 reform program. Without these reforms the IMF would not have approved the loan.

For once in a long time the general outlook is positive due to changes and reforms by the current administration.

If you say so.The 12% struck me,in my country everyone is shocked and it's raving that next year we might have 3% budget deficit.....

 

[Frogman]

If you say so.The 12% struck me,in my country everyone is shocked and it's raving that next year we might have 3% budget deficit.....

I'm not saying it's alright. Just that the core causes of that defecit has nothing to do with military spending and that the root cause is spending on public sector wages and universal subsidies for over 40 years.

Austerity measures are already being enacted to cut that figure down significantly and the right steps are being taken.

 

[flamer84]

I'm not saying it's alright. Just that the core causes of that defecit has nothing to do with military spending and that the root cause is spending on public sector wages and universal subsidies for over 40 years.

Austerity measures are already being enacted to cut that figure down significantly and the right steps are being taken.

I understand what you're saying but it baffles me that you don t understand that it puzzles the mind that Egypt can spend billions of $ on military hardware with such an atrocious economic situation.