( Financial Times ) -- Egypt 's efforts to secure a critical $ 4.8bn loan from the International Monetary Fund have run into fresh difficulty , possibly leading the government to seek emergency financing to avoid economic collapse . The IMF has expressed reservations over a government economic plan needed to seal an agreement that has been in the works , for almost two years , according to people familiar with the negotiations . At a time when Egypt 's foreign reserves have reached $ 13.5bn -- below the critical level of three months of imports -- Cairo favours a gradual approach to reform even as it is forced to cut its imports of fuel and wheat . Another complicating factor in IMF negotiations is the fact that Mohamed Morsi , the Islamist president , is reluctant to introduce measures such as a sales tax ahead of parliamentary elections . The poll that had been scheduled to start in April but finish in June has now been further delayed . A court ordered the suspension of the election schedule until the electoral law is reviewed by the Supreme Constitutional Court , which could take several weeks . Fearful of provoking social unrest at a time of political instability , the Egyptian programme favours small and hesitant steps towards the implementation of austerity measures aimed at raising additional revenue for the state and reducing energy subsidies that eat up a quarter of the budget . The IMF , however , has informed Cairo that its proposed economic reform programme is not sufficiently robust . Masood Ahmed , director of the Middle East and Central Asia at the IMF , would not comment on the negotiations with Cairo , saying only that `` the IMF view is that the programme has to have the desired impact on confidence ... [ and ] needs to have strong measures to address Egypt 's broader economic problems '' . With the prospect of an IMF agreement receding , analysts say a bridge finance package might be put together by the IMF with other donors to tide Cairo over until after the elections.Ashraf al-Araby , the planning minister , played down the idea on Sunday , adding that broad structural measures were needed . Without a reform programme , bridging financing would in any case do little to restore investor confidence . `` Any extra funds will help Egypt buy time , '' said Mohamed Abu Basha , Egypt economist at EFG-Hermes , the regional investment bank . `` But the failure to agree an IMF programme will send a negative signal to all those investors waiting for hints of real action on the ground to reform the economy . '' The much deferred agreement with the IMF was expected to unlock up to $ 9.5bn of additional finance from other external sources . The reform programme Egypt proposed to the IMF targets a reduction of the deficit from 10.9 per cent of gross domestic product in the current June fiscal year , to 9.5 per cent in the next year . According to Egyptian officials , the economic programme envisions immediate increases to the sales tax , but only on six items . These are cigarettes , alcoholic and non-alcoholic beverages , telecoms , cement and steel . It aims to introduce a fully fledged value added tax by the spring of 2013 . It stipulates raising the price of fuel to industry to international levels over three years . The government has already twice increased the price of diesel and natural gas to some energy-intensive industries , though prices to motorists and domestic consumers remain the same . Hany Kadry Dimian , a senior ministry of finance official , told the Financial Times that with the latest increases , the fuel subsidy bill for the June 2013 fiscal year would be about $ 15bn , but that if no further cuts were introduced , the cost of the subsidy next year would rise to $ 22bn . `` The programme deals with the short-term and immediate challenges and builds the foundations for more medium-term reforms , '' said Mr Dimian . © The Financial Times Limited 2013 .
Egypt 's efforts for a $ 5000 loan from the IMF have run into fresh difficulty . The government has expressed concern over Cairo 's economic situation . Ben Ali is reluctant for measures ahead of parliamentary elections .