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Saudi Arabia studies report on Egypt's financial needs
August 29, 2013 / 5:02 PM / 4 years ago

Saudi Arabia studies report on Egypt's financial needs

CAIRO, Aug 29 (Reuters) - Saudi Arabia is studying a report submitted by Egypt detailing its financial needs to support its ailing economy over the coming year, the kingdom’s ambassador to Cairo said on Thursday.

Saudi Arabia pledged $5 billion in aid soon after the army, prompted by mass protests, ousted Egypt’s first freely elected leader, Islamist President Mohamed Mursi, on July 3.

Political turmoil since an uprising ousted President Hosni Mubarak in 2011 has taken an economic toll. The government has run a budget deficit of $3.2 billion a month since January.

Interim Prime Minister Hazem Beblawi has presented a “Marshall Plan” to Gulf Arab states, seeking support that he hopes will relieve some of the pressure on the economy.

“What has happened so far is that he (Beblawi) informed the three sides involved in this,” Saudi ambassador Ahmed Qattan told Reuters, referring to Saudi Arabia, Kuwait, and the United Arab Emirates.

“All these issues are being looked at by the specialised divisions in Saudi Arabia... (Beblawi) has made a comprehensive report on Egypt’s needs,” he said.

The Gulf trio have offered Egypt a total of $12 billion since mid-July, of which at least $5 billion has been delivered.

The interim government has said it will avoid austerity measures and instead stimulate the economy by pumping in funds.

It wants to avoid unpopular moves to plug the budget deficit such as increasing taxes or cutting food or energy subsidies that eat up around a fifth of the state budget.

In an interview last month Egypt’s chief economic strategist said the cabinet planned to cut red tape and restart stalled investments to encourage a revival in business activity. (Reporting by Asma Alsharif; Editing by Patrick Werr and Alistair Lyon)

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