Finance minister Mohamed Maait
The programme is expected to accomplish this by maintaining the sustainability of the country’s positive real GDP growth, providing new job opportunities, and managing the downturn of the budget deficit and the debt to GDP ratio without imposing financial burdens on citizens, he added.
On Wednesday, the IMF reported that Egypt officially requested support from the fund to implement a second comprehensive economic and structural reform programme amid the ongoing global challenges and to address the economic troubles imposed by the Ukrainian-Russian conflict.
To this point, Maait expounded that the expected programme aims to maintain the stability of the current economic and financial conditions, boost inclusive structural reforms, and reinforce the Egyptian economy’s ability to be resilient to external shocks and further likely impacts caused by the Russian-Ukrainian war.
The Ministry of Finance announced on Thursday that Egypt’s budget deficit rose to EGP 368 billion between July 2021 and February 2022, up from EGP 320 billion during the corresponding period a year earlier.
Maait added that Egypt’s economy is on the right track and has the ability to attain its objectives despite the significant ongoing global challenges, as was proven after the onset of the pandemic.
“The reports issued by several international financial institutions and credit rating corporates prove this,” Maait affirmed.
The minister also stated that Egypt’s President Abdel-Fattah El-Sisi has instructed the government to maintain the state’s safe economic trajectory in order to fulfil citizens’ needs, expand the social protection net, and remain resilient to any possible global shocks.
“The government is closely following up on the Russian-Ukranian conflict’s implications on global prices and supply chains that come in parallel with the significant accelerated interest rate hikes globally. We plan to deal with the ongoing global challenges positively [while gearing up for the worst-case scenario in which the conflict persists into the long-term],” Maait explained.
He also added that the government is seeking to set the necessary policies to maintain the stability of the macroeconomy and its sustainability.
Following the US Federal Reserve’s decision to increase its interest rates, Egypt’s central bank hiked its key interest rates as well on Monday by one percent (100 basis points) — its first increase in five years.
Responding to the ongoing challenges, Egypt lowered its projections for real GDP growth last week for the upcoming FY2022/23 — which starts on 1 July — to 5.5 percent, down from the 5.7 percent expected in January.