Egypt's economy hopeful despite hardships, foreign loans
Newspaper Title: http://old.thefinancialexpress-bd.com/
Newspaper Number:
Friday - 27 November 2015
CAIRO: Egypt economy is still hopeful despite the country's policy to resort to foreign loans, particularly from the World Bank and the African Development Bank, as the loans reflect confidence of international and regional financial institutions in Egypt's future ability to pay back, said Egyptian economic experts.
Suffering over 11 percent of budget deficit in the outgoing 2014/2015 fiscal year, which Egypt aims to reduce by over two per cent this year, the Egyptian government has recently approved getting a loan of three billion U.S. dollars from the World Bank and 1.5 billion from the African Development Bank, one-third of each loan is to be delivered by the end of this year.
"Foreign loaning is not desirable in general, but the foreign loans are softer when they come from financial institutions rather than foreign countries, and being approved such regional and international banks is a good indicator that Egypt's economy has positively passed their assessments," Amr Saleh, professor of political economy at Cairo-based Ain Shams University and former World Bank
project officer, said.
The professor admitted that Egypt has been suffering economic hardships over the past few years of political turmoil and that the country is in dire need for funds to improve its infrastructure, enhance its exports, establish new factories, carry out development projects and restart the wheel of production.
"Although foreign loans reflect finance issues, they still indicate confidence in Egypt's future economy, as such institutions never provide loans without assessments and mission reviews," Saleh explained, noting that similar loan requests were declined by the World Bank and the International Monetary Fund
(IMF) a few years ago due to instability of the country's institutions.
The three billion dollars Egypt will get from the World Bank are supposed to be deposited at the Central Bank of Egypt (CBE) that will hand them in Egyptian pounds to the Finance Ministry to spend them on the government's intended development and infrastructure projects.
