Maait stated that the economy would be able to withstand and absorb further repercussions from the pandemic, the ongoing Russia-Ukraine conflict, and inflation wave
Egypt’s general budget is still resilient when it comes to facing global economic challenges, and has the ability to handle internal and external shocks, explained Minister of Finance Mohamed Maait yesterday, mentioning the country’s economic reform program.
Despite global economic crises and challenges, Egypt has been able to achieve financial discipline, he added.
Maait stated that the economy would be able to withstand and absorb further repercussions from the pandemic, the ongoing Russia-Ukraine conflict, and inflation wave.
In March, Egypt lowered its real GDP growth expectations for the upcoming fiscal year, reducing it to 5.5%, pointing towards issues culminating from the conflict.
The minister’s statement comes after the US Federal Reserve’s (FED) decision on Wednesday to raise its benchmark interest rate by 0.5%, the largest increase in 2 decades, as part of its efforts to keep rising inflation in check. The increase is widely accepted to have significant impact on developing countries, like Egypt.
Speeding up the time table for the same reason, the Central Bank of Egypt is scheduled to meet on Thursday May 19 to discuss the interest rates.
The state budget is expected to achieve an initial surplus of EGP 91 billion, with the aim to reduce its deficit of total GDP to 6.2% and push the debt ratio of budgetary agencies to 85% by the end of the current fiscal year (ending June 30), the Finance Ministry’s statement wrote, highlighting Egypt’s positive financial performance in the past 9 months.
Total state deficit during the past 9 months (July 2021 – March 2022) dropped to 4.9% while keeping a primary surplus, and upping tax proceeds by 12.8%, buoyed by efforts to modernize and digitize the tax system.
Related > Revenues from taxes up by 19.2% in the first 5M of FY 2021/2022 | FinMinistry
Annual spending on healthcare grew 24%, with an increase in governmental investments, including allocating EGP 80 billion to the Decent Life Presidential Initiative to develop the Egyptian countryside and EGP 16 billion for cash support as part of the Takaful and Karama Initiative with an annual growth rate of 23%, explained the Ministry’s statement, noting that there have been an additional payment of EGP 135 billion in dues for pension and insurance funds, and supporting food subsidies by EGP 50 billion.
*Updated. Article previously noted that CBE upped scheduled MPC meeting to a week earlier due to US FED raising interests. CBE has since announced it has no plans to do so and meeting will commence as scheduled on May 19
