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IMF: Egypt's financial situation deteriorating

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By The Associated Press
Thursday, May 9, 2013, 9:54 p.m.

WASHINGTON — The International Monetary Fund said Thursday that Egypt's financial situation is deteriorating and the lending agency won't move ahead with a $4.8 billion loan until receiving updated economic information and reform plans from President Mohamed Morsy's government.

Negotiations have dragged on for more than a year for the crucial funding, which is expected to usher in unpopular austerity measures. But by building confidence, the money could open the door for more loans and investment.

IMF spokesman Gerry Rice told reporters that the agency was working with Egypt to ensure that the loan package would successfully address “rising fiscal and balance of payment imbalances” and lead to broad economic growth.

Strains in Egypt's economy include a widening budget deficit and shrinking foreign currency reserves.

The 2011 uprising that toppled Egypt's longtime autocratic ruler, Hosni Mubarak, dealt a blow to foreign investment and tourism, a main revenue source. Neither has recovered, with investors and tourists still scared away by unrest and political turmoil.

An attack on an American in Cairo on Thursday contributed to the fear.

An assailant stabbed the man while they were standing outside the U.S. Embassy, security officials said.

Embassy spokesman David Ranz confirmed that a U.S. citizen was stabbed near the embassy, and said he was immediately rushed to the hospital.

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