Egypt unveils $4.9b stimulus package for struggling economy

Egypt’s interim government unveiled its second stimulus package on Monday, which will inject 33.9 billion Egyptian pounds ($4.87 billion) into the economy, with most of that money coming from aid pledged by the United Arab Emirates, Reuters reported.

Previously, the finance ministry said Egypt planned to spend around 30 billion Egyptian pounds while Ahmed Galal, the finance minister, added on Monday that the new spending would be financed mostly by the United Arab Emirates.

As three years of political unrest takes its toll on the Egyptian economy, scaring away many investors and tourists, the country is partially relying on Gulf Arab countries which pledged billions of dollars in support.

Nearly 20 billion Egyptian pounds will be spent on development projects and two billion pounds would be directed towards developing a corridor around the Suez Canal under the second stimulus package, according to Monday’s statement by Galal.

Meanwhile, oil minister Sherif Ismail has told Reuters that Egypt will need to import an additional $1 billion worth of petroleum products and secure significant natural gas supplies as it scrambles to meet energy needs for the summer.

“Of course there are needs,” said Ismail, adding that efforts to import badly needed natural gas may not succeed.

“The intention is to [make available] liquefied natural gas (LNG) and [to get] LNG facilities in operation before the summer... It is our prime concern and intention to solve this problem if not for this year by 100 percent then at least for the years yet to come.”

One government after another has struggled to cope with energy crunches, and Ismail said this coming season would be no exception.

Failure to find a solution could frustrate Egyptians, who rioted in the past over long lines at gas pumps just before the army toppled Islamist President Mohammad Mursi.

(With Reuters)