Gabriel Kawamura Pomerancblum
São Paulo – Egypt’s government is targeting 6% growth in the 2019/2020 financial year, as per the draft budget presented this week by Finance minister Mohamed Maait (pictured above), Ahram Online reported this Friday (22).
The debt-to-GDP target is 89%, the presidency said in a communiqué. The administration is looking to reduce Egypt’s budget deficit.
The draft budget also provides for the creation of 800,000 to 900,000 jobs through support to industry and exports. The goals concern the financial year starting July 1, 2019 and ending June 30, 2020.
The Arab country is working to give its economy a boost, under a loan agreement with the International Monetary Fund (IMF). The IMF expects Egypt to see 5.5% growth and 14% inflation in 2019. The USD 12 billion loan program has been in place since 2016, conditioned to economic reforms.
Egypt’s economy grew 4.2% in 2016/2017 and 5.3% in 2017/2018. Public debt was 93% of GDP in the last financial year, down from 103% in the preceding one. Actions taken to improve this ration include energy subsidy reforms and a drive to increase revenue.
Fitch Ratings upgraded Egypt from B to B+ this week, meaning it deems Egypt more unlikely not to honor its debt payments, thereby signaling to investors that Egyptian debt securities are safe. Minister Maait said Fitch’s move attests to the administration’s successful implementation of its economic reforms program. According to him, the upgrade will help strengthen reliance on Egypt’s economy and bring in foreign investments.
Translated by Gabriel Pomerancblum