Minister of Finance Mohamed Maait
State revenues are estimated to decrease by not less than EGP 150 billion in this financial year owing to the coronavirus, said Minister of Finance Mohamed Maait on Friday night.
The forecasts are based on Egypt's economic performance during the second half 2020, he added.
Maait told the Egyptian satellite channel DMC that due to challenges associated with the pandemic, state revenues decreased by EGP 200 billion in 2020 after the coronavirus hit tourism, hotels, and theatres, among others.
The losses of the tourism sector have affected many other industries, including airlines, he added.
The pandemic has thwarted the state’s efforts to decrease the budget deficit this year to a targeted 6.3 percent, Maait said, expecting the budget deficit to stand at 7.9 percent, like last year.
The state aimed at increasing the Gross Domestic Product (GDP) to six percent before the pandemic, which could have secured over 750,000 job opportunities, further revenues, and more national projects to be implemented.
Public debt went down from 108 percent to 90.4 percent of GDP over the past three years, Maait said, adding that the pandemic hindered its further fall to a previously expected 79 percent.
He noted that the last tranche of the $5.2 billion International Monetary Fund (IMF) loan will be directed to finance the budget deficit.
Maait reiterated the ministry’s commitment to secure the required financial allocations for the import of the coronavirus vaccine doses.
He said that the state will obtain 20 million vaccine doses from the Vaccine Alliance (Gavi) and is currently engaged in negotiations with the British-Swedish AstraZeneca and American Pfizer.
The minister's forecast comes less than a month after Oxford Business Group reported that Egypt’s economy is expected to be the only one in the Middle East and North Africa (MENA) region to expand in 2020 despite the pandemic.
President Abdel-Fattah El-Sisi has diected authorities since the beginning of the coronavirus crisis in mid-February to adopt policies that both protects citizens’ lives and boosts production and the economy.
These policies included monetary compensation for irregular workers who were negatively impacted by the pandemic, and increased spending on the healthcare system.
In December, the International Monetary Fund’s board approved handing Egypt a second tranche of the $5.2 billion loan, valued at $1.67 billion.
In a statement, IMF deputy managing director Antoinette Sayeh hailed the Egyptian authorities for “well management” of the pandemic and its related repercussions on economy.
She, however, referred to high level of public debt and gross financing needs in Egypt, warning that it may leave the country “vulnerable to volatility in global financing conditions”.