CAIRO — Egypt is near to securing a $2.2 billion loan from the World Bank, the finance minister announced, as the country's military rulers said Monday the unrest of the past few months has battered economic growth rates and is costing the nation $40 million per day in lost tourism revenues. Finance Minister Samir Radwan also said an International Monetary Fund team was expected in Cairo within days to look at ways of supporting the government's efforts to boost the economy. His comments came in a statement released by the ministry and did not make clear when the deal may be completed. Separately, Brig. Mahmoud Nasr, the deputy defense minister for financial affairs, said the unrest led to an 80 per cent decline in revenues from tourism, a vital sector. The figures revealed by the Supreme Military Council's finance chief offered yet another window into the drubbing sustained by the Arab world's most populous nation in the wake of the mass protests that deposed former President Hosni Mubarak. Those protests expanded after Mubarak's ouster in mid-February to include widespread labor strikes that resulted in a sharp reduction in manufacturing and exports even as foreign direct investment and tourism revenues plummeted. With revenue falling and costs mounting, Egypt has reached out to the World Bank and the IMF for aid. Nasr, in comments carried by the official MENA news agency, said GDP growth was at around 1-2 per cent compared to pre-unrest forecasts of around 6 percent for the fiscal year ending June 30. The projection is even lower than that offered by Radwan and other officials who had estimated GDP growth would slow to between 2 and 3 per cent in the current fiscal year. While the mass protests that toppled Mubarak were largely fueled by a crescendo of frustration at the growing income disparity and soaring prices in a country where about half the 80 million residents live on or below the World Bank's $2 per day poverty threshold, the continuation of the protests has only served to exacerbate the nation's economic troubles. Annual urban inflation climbed to 12.1 per cent in April compared to 11.5 per cent in March, the government said last week, citing a continued rise in food prices. The economic troubles have been building for months. As the demonstrations unfolded in the end of January, the stock market plunged — a drop that Nasr said led to losses of 113 billion pounds ($19 billion). The exchange remained closed for nearly two months as officials first grappled with bank closures and strikes in the sector, then sought to enact safeguards to prevent its collapse once it reopened. The market, which reopened near the end of March, has vacillated between moderate gains and losses. On Monday, the benchmark EGX30 index closed 1.2 per cent higher, at 5,127 points, but its year-to-date losses were still at more than 28 per cent. The government and the military rulers have been trying to revive the economy, but the near daily protests have crimped those efforts and led to a 40 per cent drop in exports and almost a halving of the nation's pre-crisis manufacturing levels, officials have said. Despite the losses, Nasr said the military was "optimistic," noting that the unrest had not affected the country's economic infrastructure and that factories were not damaged. As a result, the challenges are "difficult, but not impossible," he said. The coming period is a time "for action and production, not words," Nasr was quoted as saying, so that Egypt can move beyond the current crisis.
