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Finance minister says Egypt facing economic crisis not bankruptcy

English.news.cn   2012-12-31 03:37:50            

CAIRO, Dec. 30 (Xinhua) -- Egypt's Finance Minister Momtaz al- Saed has affirmed that Egypt is currently facing a big economic crisis not bankruptcy as some people claim.

"The economic crisis is represented in the budget deficit and the increasing internal and external debts," Saed told reporters at a news conference held here on Sunday.

He said that Egypt's economy needed 14.5 billion U.S. dollars within 20 months to overcome the ongoing crisis.

"The budget deficit continues to widen while the country financial resources only cover 60 percent of expending which is rapidly increasing, he added.

The Egyptian minister noted that Egypt might have to rationalize general spending and subsidies, particularly subsidized petroleum products, besides applying the new tax system in a way that would not affect the low-income people.

Asked about the planned loan from the International Monetary Fund (IMF), Saed reiterated that the loan would not only help bridge the budget deficit but would also to get the international accreditation to restore investors' confidence in Egypt's economy.

He said that the Suez Canal revenues and the remittances of Egyptians expats are currently the only sources of foreign currency.

The foreign reserves dropped from over 35 billion U.S. dollars to 15 billion U.S. dollars over the past two years due to the political and security turmoil, Saed counted.

Egypt's deteriorating economy can be seen in its alarming budget deficit that has reached 42 percent according to recent remarks by Prime Minister Hesham Qandil.

Other official reports warned that the deficit might vary between 30 billion and 32.5 billion U.S. dollars during the ongoing fiscal year if turmoil did not change.

Editor: Chen Zhi
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