Egypt’s budget managed to attain an initial surplus worth EGP 14 billion (0.2 percent of the GDP) in the first half of the current FY2020/2021, which ends in June, that resulted in decreasing the overall deficit to 3.6 percent in the same period, down from 4.1 percent in the first half of FY2019/2020, Minister of Finance Mohamed Maait announced on Thursday.
The announced figures came within the semi-annual report on Egypt’s FY2020/21 budget financial performance during the first half of FY2020/21, which ran from July 2020 to December 2020.
Maait said that all the performance indices of the Egyptian economy and the public budget have witnessed unprecedented improvement thanks to the economic and fiscal reforms that the government adopted.
Accordingly, Egypt has kept its positive economic growth, unemployment and inflation rates have continued to fall, and Egypt’s net international reserves increased despite the severe impacts of the pandemic, said Maait.
This came alongside with meeting the requirements of countering the COVID-19 pandemic impacts in the education and health sectors, as well as public investments, according to Maait.
The minister added that the first half of FY2020/21 experienced an improvement in the public finance indicator thanks to the increase in the state’s public revenues by 16 percent, reaching EGP 452.9 billion — which represents 7 percent of GPD — EGP 334.3 billion of which are tax revenues, with an annual growth rate of 9.9 percent.
EGP 118.2 billion of these revenues came from non-tax resources, with a growth rate of 38.2 percent.
Maait noted that such a robust public revenues performance assured the Egyptian economy success in recovering from the pandemic rapidly.
Maait also said that spending on public investments increased by 59.3 percent in the first half of FY2020/21, reaching EGP 102 billion, becoming the sector that witnessed the highest amount of spending.
Public spending in the health sector also rose in the first half of FY2020/21 by 14.7 percent, recording EGP 43.1 billion, EGP 7.3 billion of which were spent on public investments in the sector, which have grown by 49.8 percent compared to the first half of FY2019/20, according to the minister.
Moreover, spending in the education sector increased by 7.4 percent in the first half of FY2020/21, reaching EGP 74.9 billion.
Also, spending on social protection jumped by 35.6 percent, to post EGP 87.1 billion.
Ahmed Kojok, deputy minister for financial policies and corporate development, said that the ministry continues the procedures of public finance reform and fiscal control as well as putting the overall deficit and public debt on a downward trajectory.
“We are [aiming] to decrease the overall deficit to GDP ratio to 7.8 percent, up to 7.9 percent, during the current FY2020/21. Also, we are targeting that public debt [will] fall to 89 percent of GDP by the end of FY2020/21. Additionally, we are eyeing a 0.7 to 0.9 percent initial surplus”, Kojok illustrated.