Egypt plans to reduce debt-to-GDP ratio to below 90% by end of FY2021/22
Newspaper Title: https://english.ahram.org.eg/
Newspaper Number:
Tuesday - 1 February 2022
Maait’s statements are based on the biannual report issued by the finance ministry, which contains figures and indices on Egypt’s economic performance during the first half of the current FY2021/22 (July-December 2021).
As a result of the pandemic, Egypt’s debt-to-GDP ratio hit 91.4 percent in 2021.
In the same vein, Egypt managed to prolong the debt maturity to 3.3 years, up from 1.3 years, and aims to reach 3.7 years in June 2022, according to Maait.
“In this regard, we plan to preserve the country’s financial sustainability, improve the efficiency of revenues and expenditure as well as support growth opportunities and job creation,” Maait explained.
He also highlighted a plan the ministry has adopted to diversify financing resources in order to fund development and venture projects by offering US dollar-dominated bonds, green bonds, euro bonds and sovereign bonds.
Moreover, Egypt managed to attain an initial budget surplus worth EGP 3.2 billion during H1 of FY2021/22, and aims to have its rate to GDP reach 1.2 percent by the end of the fiscal year despite the ongoing challenges the global economy is facing as a result of the pandemic, said the minister.
“The sharp rise in inflation, the hikes in global prices of wheat and oil, the increase in shipping costs and the continuous supply chain disruptions have all placed heavy pressure on the state’s public budget, especially with expenses increasing by 15.4 percent in order to provide the required finances for public investments, education and healthcare,” the minister illustrated.
Accordingly, spending on health, education and social protection edged up in H1 of FY2021/22, compared to the corresponding period in FY2020/21, by 30.4 percent, 21.1 percent and 20.6 percent respectively, according to Maait.
Additionally, the investments that are financed through the state’s budget grew by 12 percent (Y-o-Y) in H1 of FY2021/22 to EGP 82 billion, according to Maait.
Furthermore, the Decent Life presidential initiative is expected to be financed with EGP 200 billion during the current FY2021/22, said Maait.
Regarding the budget’s revenues, Maait said they increased in H1 of FY2021/22 by 10.3 percent.
Tax revenues climbed by 15.7 percent in H1 of FY2021/22 compared to the same period of FY2020/21, which reflects the notable improvement in the country’s economic activity as well as buying and selling, Maait noted.
This also reflects the fruits of applying the new tax system, including merging the informal activities into the formal sector and upgrading the efficiency of tax collection, according to Maait.
Egypt also managed to curb the budget overall deficit by 50 percent over the past five years, aiming to reach 6.7 percent by the end of FY2021/22 and 6 percent in FY2022/23, down from 7.4 percent at the end of FY2020/21, Maait explained.
On the other hand, Maait said that the government seeks to further support the private sector and enable it to play a greater role in the inclusive and sustainable development process in the country and raise its contributions to economic activity.
