IMF assures new Egypt leadership of ‘extended support’

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The International Monetary Fund on Tuesday gave strong indications it is ready to help Egypt kickstart the economy and deal with socio-political issues after the new president takes office at the end of this month.

“The election of a new president is an important step forward in Egypt’s transition,” a spokesman for the global financial lender said in a statement.

“Egypt faces significant immediate economic challenges, especially the need to restart growth and address the fiscal and external imbalances. The IMF stands ready to support Egypt in dealing with these challenges and looks forward to working closely with the authorities.”

The statement came as Egypt’s military rulers hand over power to the first civilian president after being declared winner of the national election on Sunday.

The IMF has been discussing with the country’s interim leadership a possible $3.2 billion loan since late last year to help Cairo bridge fiscal shortfalls while restructuring the economy and financial system.

The Paris-based agency insisted a permanent government need to be in place to firm up the loan programme.

According to an aide, President-elect Morsi was drawing up a battle plan on Tuesday to confront Egypt’s economic and security crises, moving first to select a government of technocrats.

Egypt witnessed an imbalance of payments during first nine months of 2011-2012 with a $11.2 billion deficit compared to a shortfall of $5.5 billion a year earlier, amid political turmoil, investment flight and tourism downturn.

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