Egypt gets ‘budget lifeline’ from Qatar

Egypt’s finance minister, who has been negotiating with Gulf Arab states for financial assistance, said yesterday that Qatar had given a grant of $500 million to support the budget which has ballooned as a result of political turmoil.
Egyptian Finance Minister Hazem el-Beblawi speaks to reporters on the sidelines of a group meeting of Gulf and Arab finance ministers in Abu Dhabi on Sept. 7. REUTERS photo.

Egyptian Finance Minister Hazem el-Beblawi speaks to reporters on the sidelines of a group meeting of Gulf and Arab finance ministers in Abu Dhabi on Sept. 7. REUTERS photo.

Hazem el-Beblawi said last week he was negotiating with Saudi Arabia and the United Arab Emirates for funds worth close to $7 billion. He also said he was considering International Monetary Fund (IMF) financing that Egypt previously turned down.

Egypt’s economy, which had been growing robustly before the popular uprising earlier this year, was hit hard by the protests, which prompted foreign investors to withdraw funds and saw major revenue sources like tourism suffer.

“They transferred $500 million as a grant to Egypt,” Hazem el-Beblawi told Reuters, adding that the Qatari funds had been transferred in the past week or so. “It is a grant for budgetary support,” he added.

Egypt forecasts a budget deficit of 8.6 percent of gross domestic product (GDP) in the financial year to June 2012. Economists say the estimate may prove optimistic.

Khaled al-Attiyah, Qatari minister of state for international cooperation, told Al Jazeera late on Saturday that Qatar’s aim was to offer direct support for the budget and loans at very low rates to deal with the immediate economic issues, as well as to offer investment.

He mentioned two projects in port cities, one in Port Saeed and the other in Alexandria. “These two projects will provide hundreds of thousands of job opportunities,” he said.

Sunday, October 9, 2011
CAIRO – Reuters