Egypt gets budget help from Arab Monetary Fund

Egypt will receive $200 million to support its budget from the Abu Dhabi-based Arab Monetary Fund (AMF) this month and a second tranche of financing worth $270m in December, a minister said on Wednesday.

Egypt has so far received $1 billion in budgetary support from Gulf states to help to cover its deficit which expanded after the uprising in February that unseated President Hosni Mubarak.

The government forecasts a deficit of 8.6 per cent of gross domestic product in the financial year to the end of June 2012, although economists say this estimate may prove optimistic. The 2010-11 deficit has been officially estimated to come in around 9.5 per cent.

Planning and International Cooperation Minister Faiza Abu el-Naga told reporters the AMF funds were to support the budget.

Cabinet spokesman Mohamed Hegazy said the facility had a three-year term at an interest rate of 1.4 per cent, with a 18-month grace period.

Egypt turned down a $3.2bn financing package offered by the International Monetary Fund in the summer, arguing at the time that it would meet its financing needs locally and that the ruling military did not want to build up debts.

The government has since said it is open to fresh proposals from the IMF.