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Johannesburg - Egypt and the International Monetary Fund
(IMF) have reached agreement on a $3bn, 12-month stand-by facility to support
the government's economic programme for 2011-12, said the global lender on
Monday.
A stand-by agreement is an IMF lending instrument for
emerging market countries facing economic crises. Although the agreement has
been reached, it still needs to be approved by the IMF's executive board in
July.
Egypt's former president Hosni Mubarak has been ousted from
office after protests.
Authorities had implemented a homegrown economic programme
with the overarching objective of promoting social justice, said Ratna Sahay,
the IMF's deputy director for the Middle East and central Asia.
Egypt's draft budget for 2011-12 is mainly aimed at
enabling additional spending for job creation and protection of the poor, while
limiting the widening of the deficit. Expenditure will focus on human capital
and social investment, as well as labour-intensive public works to encourage
more job-intensive growth.
On the revenue side, the budget included a number of tax
reforms to generate resources for additional social spending.
The budget deficit, Egyptian authorities said, would be
financed in part through foreign grants and loans from bilateral and
multilateral development partners, including the IMF.
John Lipsky, the IMF's acting managing director, welcomed the commitment of the Egyptian authorities to "lasting change and structural reform".
