CAIRO: The International Monetary Fund Sunday agreed to provide Egypt with $3 billion in financing to help the Arab world's most populous nation ease the blow to its economy sustained by the popular uprising that ousted former President Hosni Mubarak. The loan announcement comes days after the government unveiled a draft budget that projects the deficit swelling to nearly 11 percent of the nation's gross domestic product, as officials look to boost social services spending to meet persistent demands by a population that complained of gross economic inequity under the former regime. The 12-month standby arrangement spans fiscal year 2011-2012, which begins in July, and carries a 1.5 percent annual interest rate – a level which Finance Minister Samir Radwan said fell far below the international borrowing costs Egypt would have had to agree to had it turned to the open market for assistance. The loan, which must still be approved by the IMF's executive board in July, is to be repaid over five years, with the payments due to begin three years and three months after its disbursement. Officials said the loan was aimed at supporting Egypt's “home-grown” economic plan of supporting social justice after decades under a regime widely accused of enriching the wealthy in a nation where over 40 percent of the population lived on or below the World Bank's poverty delineation of $2 per day. “We very much welcome the authorities' plans to foster social justice” through increasing spending on health, education, housing and transportation, Ratna Sahay, IMF's deputy director for the Middle East and Central Asia, said.
