Egypt will no longer borrow from the International Monetary Fund and the World Bank after revising its budget and cutting its forecast deficit from 11 percent of the country’s gross domestic product to 8.6 percent, according to its finance minister.
“So we do not need to go at this stage to the bank and the fund,” Reuters quotes Egyptian Finance Minister Samir Radwan, who said on Sunday (June 26) that the budget and deficit forecast were revised following a national dialogue and because of the ruling military council’s concerns about Egypt’s debt levels.
An IMF spokesperson confirmed that Egypt scrapped plans for a $3 billion loan program that it agreed to earlier this month.
“In light of these changes, the authorities see no immediate need for a financial arrangement from the IMF,” the spokesperson said, as quoted by Reuters. “The IMF continues to maintain a close policy dialogue with the authorities.”
Meantime, the World Bank said it is would re-evaluate its plans to lend to Egypt in light of the recent move by the country’s authorities. A spokesperson for the bank, however, noted that the World Bank has yet to be formally informed of the decision to scrap the IMF loan program.
“As far as we are aware these discussions are ongoing and we have heard nothing from the government to suggest the contrary,” the spokesperson said, according to Reuters. “If there is no IMF program, we will have to take stock.”
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