EGYPT is reviewing its economic program as it seeks to complete long-delayed talks with the International Monetary Fund on a US$4.8 billion loan, a senior IMF official said.

Egypt's leaders are identifying "measures they are able to move forward with now," Masood Ahmed, head of the IMF's Middle East and Central Asia department, said in an interview in Dubai yesterday. "The economic situation has also changed, so they need to make sure the measures they're proposing will achieve the necessary objectives."

Prime Minister Hisham Qandil has said he aims to clinch the IMF accord before the start of the fiscal year in July. The timetable depends on how quickly the government can complete the program and secure broad support for it, Ahmed said.

Egyptian leaders have missed a series of self-imposed deadlines for completing an IMF accord since talks began in 2011. It will require potentially unpopular measures such as tax increases and cuts in energy subsidies, to tackle the Middle East's biggest budget deficit.

The IMF described the government's proposals on subsidies as ''valuable first steps'' after talks in Cairo ended in April without an initial agreement. Egypt suspended a staff-level agreement with the IMF in November after tax increases sparked street protests.

The government has pinned hopes for an economic recovery on IMF backing, which officials say can unlock over US$10 billion in external support and restore investor confidence more than two years after the 2011 uprising that ousted Hosni Mubarak. Since then the economy has been growing at about 2 percent a year, the slowest since the early 1990s, according to IMF estimates.

The Egyptian pound has weakened about 11 percent since the central bank started limiting access to US dollars at the end of December. The depreciation triggered a surge in inflation, one of the causes of the uprising against Mubarak.

Social unrest

"The Egyptian government is facing an increasingly difficult set of economic circumstances that could raise inflationary pressures and lead to further social unrest," Standard & Poor's said in a report yesterday. "We believe that the depreciating exchange rate, together with increasing central bank financing of the government, is likely to lift inflation in Egypt above already relatively high levels."

The company has lowered Egypt's credit rating six times since the uprising and now ranks it seven levels below investment grade, effectively shutting the country out of international bond markets.

Inflation may average 10.9 percent this year while the budget deficit may widen to 11.3 percent of economic output, according to IMF forecasts.