Egypt's debt burden to increase by $1.5 billion; economic modernization cited

The Egyptian government has reached an agreement with the World Bank and the African Bank for Development to get loans from both banks worth $ 1.5 billion.

The funds are to be channeled into updating the Egyptian economy and enhance Egypt's potentials in a bid to stand up to the current challenges facing it.

Executive director for Egypt and the Arab group to the WB ambassador kamel Amr said at a press conference yesterday that the measure reflects the confidence of the bank in the Egyptian economy.

The Egyptian economy is moving at a good pace, he pointed out noting that the flexible exchange rate policy adopted by the government helped revive the Egyptian economy.

Amr added that a group of WB experts would arrive in Cairo next month for discussions on bilateral cooperation programme whose priorities were defined by Egyptian officials to modernize the national economy including measures to liberate trade and remove obstacles impeding the inflow of exports besides supporting the small-sized enterprises.

Amr praised the government's efforts in providing the subsidy to the low-income brackets.

"I prefer giving monthly financial assistance to these brackets to direct subsidy of some main commodities and services," he said.

Amr welcomed the package of draft laws currently under debate at the People's Assembly to improve the local business and investment climate and lure more capital.

In a related development the WB dismissed yesterday reports on severe differences between Egypt and the World Bank (WB) over implementation of the Sharm El-Sheikh conference resolutions and Egypt's obtaining of dlrs 2-billion loans and grants from donors.

Sources from the WB mission in Cairo said negotiations are still going on between the two sides so that Egypt would receive these loans and grants next June.