The Egyptian economy is standing on its feet and is capable of facing external shocks and global challenges, announced Egypt’s finance minister Mohammed Maait.
The Egyptian economy will overcome the global crisis, just as it overcame previous challenges, said the Minister, adding that Egypt is entering the new fiscal year with an ambitious budget that is more stimulating to growth, production, and economic recovery.
Maait said Tuesday that the measures taken by the government would enable the speedy return of the Egyptian economy to sustainable growth, explaining that the government IPO program within the framework of the State Ownership Policy Document will open horizons for foreign investments.
The government has allocated about $200 million to reduce electricity prices for industrial activities and $50 million for the real estate tax for the industrial sector.
Minister of Planning Hala al-Saeed told the parliament that Egypt aims to achieve a growth rate of about 4.1 percent in the next fiscal year, compared to an expected growth rate of 4.2 percent in the current fiscal year.
Meanwhile, the Media Observatory of the Finance Ministry denied statements attributed to Maait regarding the dollar pricing in the draft budget.
It added that reports claiming the new budget has set the pound's exchange rate against the dollar at EGP35 were untrue.
The Observatory explained that the Ministry, in preparing the draft state general budget, always uses the average exchange rate from January to March of each year, and this is what happened when preparing the draft state budget for the next fiscal year 23/24.
Simultaneously, data from the Central Agency for Public Mobilization and Statistics (CAPMAS) showed on Wednesday that the annual inflation dropped from 32.7 percent in March to 30.6 percent.
The median forecast of 13 analysts polled had suggested annual urban consumer inflation would slip to 31.0 percent in April.
Month-on-month, urban inflation slowed to 1.7 percent from 2.7 percent in March and 6.5 percent in February.
Inflation had steadily increased over the last year after a series of currency devaluations starting in March 2022, a prolonged shortage of foreign currency, and continuing delays in getting imports into the country.
Egypt has devalued its currency by half since March 2022 after the fallout from Russia's invasion of Ukraine exposed its economic vulnerabilities.
The government secured a $3 billion financial support package from the International Monetary Fund (IMF) in December.
The state-owned asset sale strategy, a key component of the 46-month IMF program that started in December 2022, witnessed slower-than-anticipated progress that risks undermining Egypt's financing plans, weakening the sovereign's foreign exchange liquidity, and eroding confidence in the currency.
Fitch Ratings has downgraded Egypt's Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to 'B' from 'B+.'
In Fitch's view, external financing risk has increased given high external financing requirements, constrained external financing conditions, and the sensitivity of Egypt's broader financing plan to investor sentiment.
In late April, Standard & Poor's revised Egypt's credit outlook from stable to negative, saying the update reflects concerns that Cairo's economic measures "may be insufficient to stabilize the exchange rate and attract foreign currency inflows to meet the sovereign's high external financing needs."
Last March, the Central Bank announced that Egypt's net foreign reserves rose slightly to $34.447 billion in March from $34.352 billion in February.
