Egyptian Finance minister, Mohamed Maait
Egypt’s budget deficit decreased to 7.8 percent in FY2020/2021, which concluded by the end of June, down from 12 percent in FY2013/2014, and it is expected to decrease again to 6.7 percent in the current FY2021/2022, Minister of Finance Mohamed Maait announced.
Maait made his comments on the occasion of the 30th of June Revolution celebration, showcasing the milestones Egypt has attained since FY2013/14.
The minister said that the budget’s initial surplus reached 1.8 percent in FY2019/20, which declined to 1.1 percent in FY2020/21 instead of an initial deficit of 3.5 percent in FY2014/15.
In terms of inflation, the minister noted that it sharply dropped to 4.5 percent in 2021, down from 22 percent in 2017.
Regarding Egypt’s real GDP growth, Maait expounded that it hit 5.6 percent in FY2019/20, the highest since the global financial crisis occurred in 2008 and the highest among emerging markets, up from 4.4 percent in previous fiscal years.
In this respect Maait stated that Egypt’s growth structure has become more diversified and cohesive, as tourism, manufacturing, construction, trade, and the oil and gas sectors are contributing to it.
Additionally, investments and exports have become the key driver of the country’s economic growth, according to the minister.
On Egypt’s reserves, Maait said that they jumped in April to exceed $40 billion, which covers seven months of the country’s exports, up from the $12 billion recorded in 2014.
He added that the floatation of the Egyptian pound, which took place in November 2016, has led to a notable decrease in the current account deficit, an improvement in hard currency inflows, and an increase in foreign direct investments (FDIs) that have been heading to treasury bills and bonds since 2019.
Concerning unemployment, Maait pointed out that its rate fell to 7.2 percent in the first half of FY2020/21, the lowest ever, down from 13.3 percent in FY 2014/15.
“The economic reform programme that Egypt adopts under the leadership of President Abdel-Fattah El-Sisi has helped the country to address the implications of the COVID-19 pandemic positively. The programme’s fruits have been also lauded by major international financial institutions, which has resulted in maintaining Egypt’s credit rating set by the three mega credit rating institutions and facilitating the stand-by agreement (SBA) with the International monetary Fund (IMF), through which Egypt secured a $5.4 billion loan that finances the second wave of economic reforms,” Maait elaborated.
Maait also noted that Egypt’s economic reform is underpinned by uplifting the efficiency of public spending as well as rationalising consumption, through which the government managed to increase spending on the health and education sectors to EGP 663.7 billion in FY2020/21, up from EGP 115 billion in FY2014/15.
He added that the IMF described Egypt’s economic reform experience as a successful reform model, as it continues to outgrow the economies of its peers.