The reduction in overall subsidies in the Egyptian budget has become a basic precondition for the IMF to approve the long delayed $4.8bn standby credit facility for Egypt, which has been under discussion for some two years.
Egypt’s chronic economic problems are piling up and the country needs more investment and aid to start dealing with these problems. The political crisis leading to the 3 July overthrow of Muslim Brotherhood-backed president Muhammad Mursi will not help, as ‘Abd Allah Shihata, an assistant to the former minister of finance warned a few days before the ouster of the president. This could lead to a rise in the cost of imports for consumers and also to an increase in state subsidies, he said. (CONTINUED - 503 WORDS)