Egypt Ministers Head to Qatar as IMF Team Reviews Loan Request

Top Egyptian ministers headed to Qatar, the Gulf Arab state that’s played a key role in keeping the country’s economy afloat, as an International Monetary Fund team in Cairo studied their loan request.

Prime Minister Hisham Qandil, along with the planning, investment and industry ministers, will discuss economic issues as part of broader talks on boosting relations with Qatar, the state-run Middle East News Agency reported.

The trip comes as Mursi’s government pushes to complete a long-delayed IMF loan bid they say is key to unlocking billions more in foreign aid and funds critical for bridging the budget deficit and buoying the economy.

Egypt’s foreign reserves have tumbled to $13.4 billion, 60 percent below their levels a month before the January 2011 uprising that toppled Hosni Mubarak, even after Qatar contributed $5 billion in deposits and loans. The decline has amplified the crisis facing the Arab world’s most populous nation as protests over wages and rising inflation contribute to the political instability that’s kept investors out.

“The situation in Egypt has materially worsened” this year, HSBC economists Simon Williams and Liz Martins wrote in a report published yesterday. With parliamentary elections delayed, “the transition process remains stalled and the window for recovery is narrowing.”

IMF Unconvinced

Planning Minister Ashraf El-Arabi has said he expects a preliminary deal with the IMF by the end of the technical team’s current visit. He said in an April 6 interview that the size of the loan will be determined after the talks based on Egypt’s financing needs, which are expected to increase, and a revised economic program submitted to the IMF. Egypt’s current application is for $4.8 billion.

The IMF is unconvinced by Egypt’s program and has asked for stronger measures, the independent Al-Borsa newspaper reported today, citing an unidentified Finance Ministry official.

Separately, President Mohamed Mursi’s foreign affairs adviser headed to Russia for economic and trade talks with officials there, the presidency said in an e-mailed statement.

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