The Egyptian government will most likely sign a memorandum of understanding with the International Monetary Fund for a $4.5 billion loan before the weekend, Egypt’s Finance Minister Momtaz El-Said told reporters.
Al Ahram reports that Egypt’s government is planning to eliminate subsidies on gasoline, in line with IMF recommendations, in order to convince the IMF that it is serious about economic reform and to close the deal.
The Egyptian government needs the $4.5 billion loan to reduce its budget deficit, which stands at 11% of GDP, as well as manage a balance-of-payments deficit that has so far cost more than $20 billion in foreign reserves, since the toppling of Hosni Mubarak last year.
Government officials have proposed austerity measures, including cutting fuel subsidies, raising sales taxes on goods and services, taxing stock exchange IPOs, higher taxes on phone calls, cars, cigarettes, liquor, carbonated drinks, coffee beans and water-resistant cement.
Weatherman calling for food riots with a chance of mayhem.