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Planning minister reviews Egypt’s economic position since 2013

Planning minister reviews Egypt’s economic position since 2013
Egypt's net international reserves currently amount to $44 billion

Cairo – Mubasher: Egypt’s economic performance and fundamentals have been significantly improving because of the current adopted reforms and policies, making the economy stands on stronger footing relative to where it was in 2013, the country’s Minister of Planning Hala El Said clarified in an official statement.

The minister’s statement is to give facts after an article was published by the Foreign Policy including numerous false and incorrect statements.

The Foreign Policy article “is severely blinded by personal political views that have washed over the author and have in turn attempted to both hide and distort facts and numbers published by international entities,” Hala El Said stated.

Below are eight points comparing Egypt’s economic position in fiscal year 2012/2013 and the current economic standing as of FY18/19, as clarified by the minister:

Growth rate reaches 5.6% in FY18/19

Egypt’s economy grew 2.1% during the period from 2011 to 2013, a rate that was low compared to the population growth that pushed the average citizen share in the growth pie to decrease, Hala El Said noted.

During Fiscal year 2018/2019, the country’s growth rate has reached 5.6% as reported by the government’s latest published figures as well as the International Monetary Fund’s (IMF) updated estimates, with the average citizen’s share of the growth pie increasing by 2.2%.

Unemployment rate declines to 8.1% in 2019

The country’s unemployment rate had averaged 12.7% from 2011 to 2013, followed by a steady decline over the past four years to reach a low of 8.1% in March 2019, according to the Central Agency for Public Mobilization and Statistics (CAPMAS).

“Not only growth is picking up in Egypt, but it is enabling more people to find jobs,” minister Hala El Said said.

Overall deficit may decline to 8.4% in FY18/19

The planning ministry stated that public finance in Egypt is in a much better and healthier position today when compared to 2013.

According to the latest estimates by the finance ministry as well as the International Monetary Fund (IMF), Egypt’s overall deficit would decline to 8.4% of gross domestic product (GDP) in FY2018/19 compared to 13% of GDP in FY2012/13.

“In simple worlds, government expenditures bill would be higher than government collected revenues by 8.4% of Egypt’s national income (more often used name is GDP) after such bill peaked at 13% of Egypt income in FY2012/13,” Hala El Said concluded.

Primary Surplus might worth 2% of GDP

The Ministry of Finance is one month ahead from officially announcing the realisation of primary surplus for FY18/19 for the first time in 15 years.

Egypt is on track to realise primary surplus worth 2% of GDP versus a primary deficit worth 5% of GDP back in FY12/13.

“The current government adopted policies enabled Egypt government to realise surpluses after years of running deficits that peaked in FY2012/13 (when the author party was in charge),” Hala El Said clarified.

Egypt triples spending on investments

Such surpluses were realised in Egypt even though the country tripled spending on investments over the past four years to upgrade infrastructure as well as improving basic services such as availability and reliability of electricity supplies along with improving the quality of the existing electricity stations and grids.

“The government also spent billions to extend roads network and its quality to improve connectivity across governorates and to significantly bring down road’s accidents and fatalities,” the planning minister added.

The government has included financing one of the biggest global campaigns to screen the entire 100 million population for hepatitis C virus and other critical diseases, providing immediate free treatment for all patients.

“At the same time, the government has been financing one of the biggest social housing programmes globally with almost 700,000 units being delivered in four years,” Hala El Said stated.

Allocations to food subsidies up to EGP 87 billion

Egypt has also realised primary surplus despite spending more on social programmes and on social safety nets.

The budget allocated to food subsidies was raised to EGP 87 billion in FY18/19 up from EGP 35 billion in FY13/14.

“Annual budget allocations to treat citizens on behalf of the government including covering their health insurance bill increased to EGP 9 billion in FY2018/19 after it was just over EGP 1 billion back in FY2013/14,” according to the minister’s statement.

Furthermore, cash transfers programmes (Takaful and karama) were allocated EGP 17.5 billion in FY18/19 versus less than EGP 5 billion in FY13/14.

Total government debt may reach 91% of GDP in June

Egypt’s total government debt, both domestic and external, would reach 91% of GDP in June 2019 after hiking at 107% in June 2017, following the devaluation, and after reaching 90% in June 2014. 

“This mean [means] that the current government policies enabled Egypt to bring down its total debt (domestic and external) by 16% of GDP in just two years, making Egypt government one of the best performers in terms of its ability to bring down debt levels as ratio to country national income know as GDP. This does not mean that current debt level is not still high and that is why the government has official published its medium-term targets to further bring debt to GDP ratio down to 80% in June 2022,” the minister added.

Egypt’s int'l reserves reach $44 billion

Net international reserves currently amount to $44 billion versus $14.9 billion in June 2013, according to the Central Bank of Egypt (CBE), Hala El Said added. 

“This occurred as Egypt current account deficit (sum of Egypt trade balance of goods and services plus money transferred by Egyptian living abroad back home) declined from a peak of almost 5% of GDP in FY2012/13 to almost 2.5% of GDP in FY2018/19,” the minister added.