Egypt will not borrow from the World Bank and International Monetary Fund after revising its budget and cutting the forecast deficit, even though a loan had been agreed to, said Finance Minister Samir Radwan. The 2011-12 deficit in the first draft budget was forecast at 11 per cent of gross domestic product, but was revised to 8.6 per cent because of a national dialogue and the ruling army council’s concerns about debt levels, the minister said. “We do not need to go the World Bank and IMF at this stage,” Radwan said, adding that Egypt, which had borrowed from the IMF under ousted president Hosni Mubarak, still had the “best relations” with the two US-based institutions. Despite the budget revisions, the government said it still expected growth of 3.0-3.5 per cent, in line with previous forecasts, which some economists said could prove to be optimistic. This month Egypt agreed on a $3 billion, 12 month standby loan facility from the IMF, which Cairo had said came with more lenient terms than usually associated with such lending. An IMF spokesman confirmed on Saturday that Egypt has scrapped plans for the loan programme. “In light of these changes, the authorities see no immediate need for a financial arrangement from the IMF,” the spokesman said, adding: “The IMF continues to maintain a close policy dialogue with the authorities.” The IMF and WB had been among a range of foreign countries and bodies to offer funds to Egypt to help cover a big budget shortfall after the economy was plunged into turmoil by the mass protests that drove Mubarak from office on February 11.
