Egypt’s GDP is expected to hit EGP 6.4 trillion in the current FY 2020/2021, which ends in June, up from EGP 5.5 trillion in FY 2019/2020, Minister of Finance Mohamed Maait said on Monday.

Maait attributed the expected increase to the expansion in developmental investments.

Maait said that Egypt is one of the countries that managed to curb its debt to GDP ratio, explaining that debt decreased by 20 percent over the last three years despite the repercussions of the coronavirus pandemic.

The economic reform programme and the solid buffers it provides for the economy helped Egypt navigate through the ongoing crisis, he said. Global credit rating institutions maintained Egypt’s credit rating with a positive outlook, which reflects the succession of Egypt’s economic reform, the minister added.

The procedures the government has adopted to rationalise spending over the past few years have resulted in attaining financial savings that helped the country avert economic contraction amid the crisis, resume the structural reform process, curb the inflation and unemployment rates, and replenish its international reserves to $40.3 billion by the end of April, Maait said. 

As of 1 July, Egypt’s FY 2021/22 budget will be rolled out with a total value of EGP 2.6 trillion, the biggest in Egypt’s history.

The new budget was drafted amid expectations that Egypt will restore its pre-pandemic growth and macroeconomic performance levels after the notable slowdown the country’s economy is witnessing this fiscal year. 

According to the FY 2021/22 draft budget, Egypt's real GDP is expected to grow to reach 5.4 percent, after witnessing a slowdown in FY 2020/21 estimated at 2.8 percent, in light of the incremental recovery of Egypt’s economy from the COVID-19 pandemic.

The state targets increasing the new budget’s revenues through rising tax revenues by 18.3 percent, including EGP 297.1 billion in income tax revenues collected from non-sovereign bodies, excluding the CBE, Suez Canal, and taxes from T-bills and T-bonds proceeds.

The budget includes a targeted EGP 449.6 billion of value-added taxes, a growth of 17.2 percent compared to FY 2020/21.

Property tax is projected to grow by 0.08 percent of GDP in FY 2021/22 to record EGP 5.6 billion.

The government plans to raise customs tax by 12.3 percent to reach EGP 42.4 billion. It is also eyeing the collection of EGP 380.6 billion in FY 2021/22 from non-tax resources.