Egypt targets narrower budget deficit of 8.4%

The Egyptian economy has been battered by years of turmoil that began after mass protests in 2011 forced President Hosni Mubarak to step down. (Reuters)
Updated 04 September 2018
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Egypt targets narrower budget deficit of 8.4%

  • ‘Our economy has grown faster than we’ve expected, our GDP has grown faster than the falling of our debt’
  • The economy has been battered by years of turmoil that began after mass protests in 2011 forced President Hosni Mubarak to step down

CAIRO: Egypt is targeting a budget deficit of 8.4 percent of GDP for the 2018-19 fiscal year that ends in June, compared with 9.8 percent in the previous year, Finance Minister Mohamed Maait told a news conference on Tuesday.
“Our economy has grown faster than we’ve expected, our GDP has grown faster than the falling of our debt,” Maait said.
Egypt aims to reach an average interest rate on government debt instruments in the current 2018-2019 budget of about 14.7 percent compared with 18.5 percent in the 2017-2018 fiscal year.
“On debt strategy, there is no one single solution. We are working on creating a package to eventually reach our targets,” Maait said.
“One of the ways is to put a limit on what you’re going to borrow, internally or externally. You want to grow, you want to finance the growth, so either you have enough funds for your growth or you’re going to have to borrow.”
Egypt canceled on Monday three and seven-year treasury bond sales, an auction that had had a total value of 3.5 billion Egyptian pounds ($196 million), saying that the interest rates required were “not within the logical limits,” the finance ministry said in a statement on Tuesday.
The economy has been battered by years of turmoil that began after mass protests in 2011 forced President Hosni Mubarak to step down.
But the country has shown signs of recovery in recent months amid tough reforms including cuts to energy subsidies implemented by the government of President Abdel Fattah El-Sisi as part of a $12 billion International Monetary Fund loan agreement. Speaking on the sidelines of the Euromoney conference in Cairo, Maait said that the government had not set a date for the issuance of Euro bonds, or even the size of the expected offering.
“We will send the government within weeks a plan to manage the public debt, including putting a cap on external borrowing,” he said.


Porsche first German carmaker to abandon diesel engines

Updated 23 September 2018
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Porsche first German carmaker to abandon diesel engines

  • The company would concentrate on its core strength, ‘powerful petrol, hybrid and, from 2019, purely electric vehicles’
  • But Porsche promised it would keep servicing diesel models on the road now

BERLIN: Sports car maker Porsche said Sunday it would become the first German auto giant to abandon the diesel engine, reacting to parent company Volkswagen’s emissions cheating scandal and resulting urban driving bans.
“There won’t be any Porsche diesels in the future,” CEO Oliver Blume told the newspaper Bild am Sonntag.
Instead, the company would concentrate on what he called its core strength, “powerful petrol, hybrid and, from 2019, purely electric vehicles.”
The Porsche chief conceded the step was a result of the three-year-old “dieselgate” scandal at auto giant Volkswagen, the group to which the luxury sports car brand belongs.
VW in 2015 admitted to US regulators to having installed so-called “defeat devices” in 11 million cars worldwide to dupe emissions tests.
It has so far paid out more than €27 billion in fines, vehicle buybacks, recalls and legal costs and remains mired in legal woes at home and abroad.
Diesel car sales have dropped sharply as several German cities have banned them to bring down air pollution — a trend that Chancellor Angela Merkel was due to discuss with car company chiefs in Berlin later Sunday.
Stuttgart-based Porsche in February stopped taking orders for diesel models, which it had sold for nearly a decade.
Blume said Porsche had “never developed and produced diesel engines,” having used Audi motors, yet the image of the brand had suffered.
“The diesel crisis has caused us a lot of trouble,” he said, months after Germany’s Federal Transport Authority ordered the recall of nearly 60,000 Porsche SUVs in Europe.
Blume promised that the company would keep servicing diesel models on the road now.
According to the paper, Porsche also faces claims of having manipulated engines to produce a more powerful sound with a technique that was deactivated during testing.
Blume acknowledged that German regulators had found irregularities in the 8-cylinder Cayenne EU5, affecting some 13,500 units.
Merkel, Transport Minister Andreas Scheuer and heads of German auto companies were due to meet in Berlin later Sunday to discuss steps to avoid more city driving bans.
The German government hopes to see one million fully electric and hybrid vehicles on the road by 2022, up from fewer than 100,000 at the start of this year.