The Egyptian government targets a GDP growth of 6.5% in the coming fiscal year (FY) 2019/20 up from 5.3% in FY 2018/19, according to a press statement on Thursday.
The statement said that Egypt’s GDP stands at EGP 6.214tn, and the government targets an initial surplus of 2% before deducting the public debt value, which will decrease budget deficit to 7%, and inflation to 10.9% on annual basis.
Minister of Finance Mohamed Maait said the 2019/20 budget will take into account the goals of the IMF-backed economic reform programme, and sustainable development plan, adopted by the government from 2018 until 2022. The plan aims to increase the country’s growth rate gradually until it reaches 8% in FY 2021/22.
Maait determined five main objectives for financial and economic policies during the new fiscal year. The objectives included the provision of all necessary financial allocations to protect national security, preserve national sovereignty, raise awareness of the dangers surrounding the country, improve the standard of living, respect the rights of the poorest and marginalized groups, increase the insurance umbrella and social safety nets, and improve the efficiency of the health care system.
Maait added that the third objective is to focus on the economic development and achieve high economic growth rate, so as to overcome the existing challenges and reduce the rates of inflation, unemployment and the deficit of the general budget to be able to cope with the consequences of the rapid population growth.
According to Maait, the fourth objective focuses on doubling the investment rates to accelerate economic development while stimulating foreign direct investment in the presence of strict measures to ensure the high economic and social returns, such as its impact on the levels of operation, export and modern technology.
The fifth objective focuses on raising the efficiency of government performance through achieving integration and coordination between different ministries and bodies, controlling financial and administrative corruption, and implementing the comprehensive plan for administrative reform.
Raising the growth rate requires boosting the investment rate by about 25 percent, with the gradual reduction of unemployment rates to 8 percent by working to expand the absorptive capacity of the Egyptian economy to provide about 900,000 jobs annually, according to the minister.
He added that it also needs to decrease poverty rates to 25 percent by the end of the program, the budget deficit to 5 percent, trade deficit to 7.7 percent and the public debt to less than 80 percent of GDP.
