São Paulo – Egypt plans on having its Gross Domestic Product (GDP) grow by 6% in the 2018/2019 fiscal year. The plan has been disclosed this Friday (17th) by the country’s Finance minister Hany Qadry to ambassadors from European Union countries. According to the Al Ahram newspaper, Qadry said Egypt intends to grow primarily through investment in new projects. The North African country wants to recruit private partners in order to execute the new plans.
In addition to the investment project, the Egyptian minister presented his country’s targets for curbing rising debt. According to Qadry, Egypt is hoping to reduce its budget deficit, which amounted to 12.6% of GDP in the 2013/2014 fiscal year, by 8% to 9% come 2018/2019. Within the same time frame, Egyptians plan to bring the debt-to-GDP ratio down to between 80% and 85%. All of these forecasts are part of a medium-term economic plan drafted by the cabinet of president Abdel-Fattah El-Sisi, who took office in July after being elected with 97% of votes.
El-Sisi is a former Egyptian Armed Forces commander. He stepped down from his post to run for president, a position left vacant since Mohamed Morsi was ousted in July last year. Kuwait, Saudi Arabia and the United Arab Emirates have since pledged to provide grants and loans to the country. Qatar supplied aid to Egypt up until Morsi stepped down. However, Egypt is now repaying Qatar’s loans.
In the 2013/2014 fiscal year, which started on July 1st, 2013 and ended on June 30th this year, Egypt’s economy grew by 2.2%. Qadry told the European ambassadors his administration is working to create the conditions for higher private investment inflows through measures such as passing a new investment law. The country is also implementing measures to cut down fuel subsidies, even though this tends to drive up inflation.
In the past few months, prices have increased by more than 10%, but according to a statement from the Ministry of Finance, the Central Bank of Egypt will bring inflation back to a “comfortable” single-digit zone by maintaining its monetary policies and reducing infrastructure bottlenecks. The government is also expecting to increase revenues by implementing new taxes: one on value-added products, another on capital gains and a temporary to be levied on the country’s wealthiest.
*Translated by Gabriel Pomerancblum
