CAIRO: Egyptian Finance Minister Mohamed Maait said on Sunday that the financial performance of the Egyptian economy during the coronavirus disease (COVID-19) pandemic exceeded expectations, according to the International Monetary Fund’s (IMF) testimony in its Global Economic Outlook report for October 2020.
In an official statement, he said the economic reforms adopted by President Abdel Fattah El-Sisi had strengthened the Egyptian economy and made it resilient in the face of internal and external challenges.
He said much of that was due to the flexible handling of the pandemic, as the state adopted a proactive policy of allocating 2 percent of its gross domestic product (GDP) to support the most vulnerable economic sectors and groups. Steps were taken in a way that contributed to mitigating the shock and supported the national economy, he said.
The minister said the IMF expected the Egyptian economy to rapidly recover in the medium term and for the country to achieve growth rates higher than those prior to the pandemic.
The IMF also expects a decline in the overall deficit of GDP to 5.2 percent during 2022-23 and 3.8 percent by the 2024-25 fiscal year, reflecting the ability of Egyptian financial policies to deal positively and effectively with local and international variables.
“According to the estimates of the IMF, the state budget, despite the pandemic, will achieve a primary surplus of 0.4 percent of GDP during the current fiscal year, which will rise to 2.1 percent during 2022-23, and the trend will continue at a sustainable rate up to 2 percent on average until 2025,” Maait said.
The finance minister said the IMF expected Egypt to increase total state revenues during the current fiscal by 20 percent, compared to 19.2 percent in the previous year, continuing until the fiscal year 2024-25.
Public expenditures are also expected to decrease to 25.4 percent in the current fiscal year, compared to 28.4 percent last year.
Despite the IMF report indicating a state of ambiguity about the outlook for the global economy, the Egyptian economy’s outlook remained optimistic, Maait said, as the IMF has raised its estimate of the growth rate to 3.5 percent instead of 2 percent during the last fiscal year.
He pointed out that the state’s general budget recorded a slight initial surplus of 100 million Egyptian pounds ($6.39 million) during the first quarter of the current fiscal year, despite the repercussions of the pandemic, meeting the needs of the health sector, all budgetary bodies, greatly increasing government investments and paying pension fund dues.
He said the annual growth rate of revenues rose to 18.4 percent during July and September 2020, despite the continuing negative effects of the pandemic on economic activity, while the annual growth rate of expenditures reached 11 percent due to the increase in government investment allocations, the provision of support allocations and social protection programs, and increased spending on health and education.