Finance Minister Mohamed Maait has announced the outline of a 130 billion EGP recovery plan. This plan includes the addition of 450,000 new families eligible for aid from the Takaful and Karama social security programs, as well as the payment from April 1, initially planned for July 2022, of the annual bonus granted to public officials between 8 and 15% of annual salary.
The same is true for retirement pensions, the planned increase of which (13%) will also be paid from April instead of next July at an additional cost of EGP 8 billion. The package will include a 50% reduction in capital gains tax on EGX IPOs over the next two years and the creation of a tax exemption for trading shares between listed and unlisted companies.
The government will also relaunch the customs exchange rate (already implemented during the 2016 devaluation), fixing it at EGP 16.00 / USD 1.00 for imports of commodities and raw materials. A new pricing mechanism for unsubsidized bread has been put in place with set prices that will be reviewed every three months.
Finally the Prime Minister affirmed that the Ministry of Supply would sell on the market bags of supply at reduced prices of 52 EGP, 95 EGP and 123 EGP. In addition, the Armed Forces have offered to sell basic products directly to the population at very reduced prices.
Egypt revises GDP growth forecast down
Planning and Economic Development Minister Hala El-Said lowered GDP growth forecast for next fiscal year 2022/23 (beginning July 1) to 5.5% from 5.7% scheduled for January.
At the same time, the Ministry of Finance has revised downwards its budgetary objectives for the 2022/23 financial year in the light of the conflict in Ukraine. Public spending is expected to increase by 12% with a projected deficit of 6.9% against 6.7% initially forecast.
The ministry also lowered its primary surplus target to 1.5% in 2022/23 from 2% previously.
Source Embassy of France in Lebanon