Egypt is expected to have the world’s third economic growth by 2026, according to a Harvard Centre for International Development report. In the meanwhile, signs of economic recovery seem to increase. The country achieved the first budget surplus in 15 years (0.2 percent), worth 4 million Egyptian pounds (around 190 000 €) in its 2017 – 2018 fiscal year.
To revive its crisis-hit economy, Egypt didn’t need to be asked twice to widely advertise its 0.2 percent primary budget surplus and reiterate its commitment to pay oil companies’ debts by the end of 2019 to lure investors. Cairo has enacted a raft of austerity measures under the supervision of the International Monetary Fund (IMD) since 2016.
The country devalued the Egyptian pound and pushed through step fuel and electricity subsidy cuts hoping for a financial comeback after years of political upheaval and security instability. It is in this context that president Abdel Fattah Al Sissi issued Law No. 100 of 2018 approving the state budget for the fiscal year 2018 – 2019 (which begins in July and ends in June).
What you need to know about Egypt’s new budget
Here are 6 things you need to know about the new budget:
- Target growth stands at 5.8% of the GDP, to be accelerated gradually to 8 percent by 2021 – 2022. The IMF expects a strong 5.5 percent growth next year with and anticipates the GDP to record 6 percent in 2023.
- Egypt seeks a 2% primary budget surplus and aims to reduce deficit by 8.4% of the GDP;
- The government strives after 10 billion in revenues by offering shares in state owned companies to the public;
- Public debt to be minimalised to 91% of the GDP;
- Unemployment rate to stand between 10 and 11%. Egypt 2030 Vision aims to reduce unemployment from the current 10.6% to 4%;
- The targeted inflation rate is around 10%.
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