CAIRO: The Arab Monetary Fund (AMF) is planning to give Egypt $200 million in an effort to boost Cairo's budget pitfalls after Egypt's economy continues to struggle, an Egyptian minister said on Wednesday. The Abu Dhabi-based fund hopes the initial $200 million, to be followed by a second financing worth around $270 million will help boost Egypt's struggling economy. Egypt has been hit hard by an economic downturn since the ousting of former President Hosni Mubarak in February, with protests continuing and violence becoming more common, which has pushed tourists away from the North African country. Since the uprising, Egypt has received approximately $1 billion in budget support from Gulf countries as it attempts to meet its budget demands. The government forecasts a deficit of 8.6 percent 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 percent. Minister International Cooperation Fayza Abouelnaga 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 percent, with an 18-month grace period. Egypt turned down a $3.2 billion 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. Since then, however, the government here has said it is willing to take IMF money in order to boost the economy in the struggling country with only two weeks until elections begin. BM
