Egypt’s economic reform program has contributed to better economic growth and less unemployment and inflations rates, making Egypt’s experience a shining example of economic reform, Minister of Finance Mohamed Maait said.
Maait was speaking during the “Story of the Homeland..Between Vision And Achievement” conference, which kicked off on Saturday in the New Administrative Capital in the presence of President Abdel Fattah El Sisi.
Economically and financially speaking, the period from 2011 to 2023 can be divided into four chapters, beginning with the 2011-2013 period and the difficulties the country was going through until the June 30 Revolution, which was a significant milestone in the nation’s history, the minister remarked.
He said the second chapter extends from 2013 until 2016 when the economy continued to suffer due to the negative fallout from the 2011 incidents.
Implementing the economic reform program in 2016 helped in driving economic growth, cutting unemployment and inflation rates, stabilizing exchange rates, and ensuring availability of various commodities at stable prices, Maait added.
“During the global crisis of COVID-19, President Sisi emphasized the need to keep up efforts for completing development projects while taking necessary medical precautions,” the minister said.
He noted that large funds were channeled to complete these projects and keep the work going on until recovery would kick in, but that did not happen due to certain changes, including a rise in oil prices above state budget rates.
Within few weeks of rge start of the pandemic, capital outflows from emerging economies, including Egypt, amounted to nearly $23 billion, putting the national economy and local currency under a lot of pressure, Maait said.
However, Egypt suffered no shortages of food commodities during the international crisis that lasted for three and a half years, the minister added.
Thanks to economic reforms, the budget deficit went down from 12.9 per cent to 6 per cent, and this figure could have been as low as 5 per cent had not been for the COVID-19 pandemic, the finance minister said.
After the current period of global financial turmoil, the budget deficit will drop to 4.5 per cent, and this is a reasonable decrease in light of relevant EU indicators, Maait noted.
Maait highlighted the negative impact of rising interest and exchange rates, the former led to an increase in public debt by about EGP 1.8 trillion.
“However, that does not mean we have a financial performance problem,” he said.
The cost for petroleum subsidies has been decreased from 61 per cent to 23 per cent, and a significant increase has been achieved in support for pension funds, thanks to the economic reform program, the minister noted.
Maait also touched upon the benefits of the economic reforms for the Takaful and Karama cash transfer program, which cost the State EGP 35.5 billion, not to mention a breakthrough rise in minimum wages from EGP 1,200 to EGP 4,000.
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