The International Monetary Fund has delayed sending a team to Cairo to negotiate a US$4.8 billion loan while the Egyptian government works to complete its economic reform program, a newspaper quoted the country's finance minister as saying.
Egypt was due to receive a team from the IMF at the end of September to discuss the terms of the loan. It urgently needs the financial support to prop up state coffers that have been weakened by economic turmoil since a popular uprising last year, which ousted President Hosni Mubarak.
The government needs to complete the program before the loan talks to demonstrate to the IMF that it is serious, the minister, Momtaz al-Saeed, told Al-Borsa financial daily.
The program's two main axes are a restructuring of subsidies and taxes, he said. The government is working diligently on studies of these and the reform program should be finished soon, he added.
Optimism that a new, Islamist-led administration was moving fast to secure the long-delayed loan and avoid a fiscal crunch has sent the country's stock market soaring in recent months and yields on government debt have tumbled.
The IMF is demanding Egypt put a program in place that will narrow a budget deficit that has mushroomed to 11 percent of gross domestic product since the uprising ousted Mubarak in February 2011.
President Mohamed Morsy's government says it wants to limit energy subsidies, which eat up about a quarter of all state spending, by targeting them more toward those who need them most.
Prime Minister Hesham Qandil said last month that the government planned to introduce a coupon or smart card system in October to ensure that the poor, rather than everyone, got subsidized butane cooking gas.
The government sells canisters of butane for LE5 ($0.82) each, while their actual production cost is more than LE65.
Al-Borsa quoted Saeed as saying the IMF team would not return until well after the IMF's annual meeting in Tokyo. That meeting takes place on 9–14 October.
The government is also lobbying hard to kickstart inward investment that has stagnated since the uprising.
Neither the minister nor an IMF spokesperson in Washington was immediately available for comment.
