Egypt’s Ministry of Finance is working on a plan to reduce the deficit from 107-108 percent of GDP during the previous fiscal year to 80 percent by 2020, Egypt's finance minister Amr Al-Garhi said in a speech at the opening ceremony of a conference co-hosted by the International Monetary Fund, the Central Bank of Egypt and the Egyptian government to promote higher economic growth and job creation in Egypt.
The minister explained during conference, which took place on 5-6 May in Cairo, that the plan aims to reduce the overall deficit in the budget and achieve an initial surplus of 2 percent of the GDP.
The finance minister highlighted that the plan also aims to increase the average per capita income, which would result in a “remarkable” rise in living standards.
"Improving living standards, creating more suitable job opportunities and reducing the unemployment rate, which is clearly declining, are among the top priorities of the government," the minister said.
He explained that the unemployment rate has dropped from 13 percent to 11 percent this year amid reform measures taken by the government.
El-Garhi also said that the government is working on implementing structural reform policies for the industrial sector and other economic sectors. He added that a law concerning a simplified system for tax accounting for small projects is being drafted in an effort to boost this sector by 10 to 15 percent.
The minister also said that over the past five years, Egypt’s public debt has increased almost five-fold from EGP 800 million.
"No more burdens should be thrown on the shoulders of citizens, and we are working to direct part of the funds to support the social protection programme and investment projects," says the minister, adding that public debt is expected to continue to rise during the coming period.
"We have faced many challenges and are still facing others, but Egypt has huge economic potential to develop the industrial, agricultural and tourism sectors, this is aside from the discovery of oil and gas fields, which we expect will create sustainability in growth rates during the upcoming decade," says El-Garhi.
The reform programme
The minister said during the conference, which was attended by IMF representatives, that the success of the country’s comprehensive economic reform programme is made possible due to the keenness and support of the political leadership.
"The reform programme is difficult and comes under difficult circumstances. There are a lot of challenges facing the country, which for years has suffered from flawed policies that could not win the confidence of world markets," the minister said during the conference, adding that the Egyptian economy has borne heavy expenses.
He stressed that the reforms adopted by the government aim at restoring stability to Egypt's economy, regaining confidence from the business community, as well as improving the main indicators of the economy, especially on inflation, public debt and unemployment; while accelerating growth rates by 5 to 6 percent.