Egypt’s cabinet has initially approved the FY2020/2021 draft budget in its meeting held on Thursday.
According to the cabinet’s statement, Minister of Finance Mohamed Maait noted that the FY2020/2021 draft budget aims at maintaining the country's financial stability and boosting economic activities through curbing the budget deficit to 6.3 percent from the GDP, in addition to attaining an initial surplus that will help reduce state debts.
He added that it also targets boosting and stimulating growth and operations, especially in the productive sectors, along with infrastructure improvement efforts.
The minister added that the new draft budget adopts specific initiatives and procedures aimed at improving citizens’ living conditions, including medium-income classes and a positive contribution in enhancing human development activities in the education and healthcare sectors.
Moreover, it focuses on expanding further in adjusting commodities and services prices, expanding the tax base, and making use of state asset revenues through increasing surpluses transferred to the state treasury.
The presentation Maait reviewed in the meeting touched upon the key economic assumptions over the medium term regarding GDP, real growth, inflation, governmental T-bills and bonds rates, exchange rates, Brent barrel average price, and US wheat average price.
He added that the FY2020/2021 draft budget targets reducing public debt to GDP ratio to 82.7 percent by the end of June 2021, which requires attaining a two percent initial surplus from GDP in 2020/2021. It also targets to reduce deficit to 6.3 percent from GDP in 2020/2021.
Maait said the ministry is intensifying efforts to pursue revenue growth in higher rates than the annual disbursement growth, in addition to rationalising spending to achieve public fiscal indices sustainability and raising spending efficiency on social protection and infrastructure, and basic services improvement.
“The FY2020/2021 draft budget is designed to increase wages and workers' compensation allocations for the sake of increasing state workers' incomes through targeting income annual growth that exceeds the targeted inflation rate. Moreover, it focuses on raising the state’s budget financed public investments, ” according to Maait.
The FY2020/2021 draft budget also includes allocations for pushing the economic activity, incorporating exports support with an increase of EGP 1 billion, domestic product promotion, consumption support, Upper Egypt development projects, and industrial zones servicing, Maait said.
He added that it includes allocations of EGP 36 billion for education, healthcare, and social solidarity support initiatives.