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Egypt's new FY's budget exceeds EGP 3 trillion We aim to record a real GDP growth rate of 5.5% in the new FY; achieve primary surplus of EGP 132bn: Finance Minister
Minister of Finance Mohamed Maait said that the state's general budget for the new FY is the largest in Egypt's history, as it exceeds EGP 3 trillion. Its total expenditures, according to estimates, are about EGP 2.71 trillion, while the total estimated revenues are EGP 1.18 trillion and EGP 18bn. He pointed out that the total spending of the state's general budget and the budgets of public economic bodies amounts to EGP 5.7 trillion, as the volume of expenditures by economic authorities is EGP 2.6 trillion for 59 economic authorities, excluding the National Authority for Military Production. He added that in implementation of the president's directives, the allocations for health and education have been increased in the new budget to meet the constitutional entitlement. The total allocations for the university and pre-university education sector amounted to EGP 476.3bn, and EGP 79.3bn for scientific research. Also, the total allocations to the health sector amounted to EGP 310bn. This will contribute to enhancing spending on human development. Furthermore, he explained that the financial allocations for public investments have increased to EGP 376.5bn — an increase of 9.6% over the expected estimates of the current FY's budget to maximise spending on national development projects — such as the Decent Life Presidential Initiative, the Canal Lining Project, and developing the irrigation system, in addition to allocating EGP 5bn to the Urban Development Fund to develop slums and unplanned areas as per Egypt's 2030 Vision. He also indicated that EGP 6bn were allocated to support and develop exports, reflecting the government's keenness on supporting the export sector in facing economic crises as one of the pillars of the national economy by striving hard to quickly respond to the delayed export burdens of exporting companies with the Export Development Fund. This contributes to providing cash liquidity that enables it to fulfil its obligations towards its customers and to preserve employment in light of these global challenges. Additionally, Maait explained that EGP 5bn have been allocated to support reducing the price of electricity for the industrial sector, and EGP 1.5bn for the cost of real estate taxes on the industrial sector. This will stimulate investment and increase the participation of the private sector in various economic activities to diversify production patterns, encourage the local industry to increase growth rate, create job opportunities, and maximise exports. He added that EGP 191bn has also been allocated to the annual instalments for the Insurance and Pensions Fund, allowing financing of pensions to increase at an annual cost of EGP 38bn and an additional cost of EGP 8bn from April to June 2022, which will allow 10m pensioners and eligible beneficiaries to benefit from that amount. Accordingly, the total amounts transferred from the public treasury to support pension funds amounted to EGP 701bn over four years. The minister pointed out that the new budget includes allocating EGP 356bn to support and social protection programmes, including EGP 90bn to support food commodities and bread to ensure their availability for about 71m citizens and EGP 22bn for the Takaful wi Karama programme, increasing the number of beneficiaries to 4m families. Furthermore, EGP 3.5bn have been allocated for the delivery of natural gas to about 1.2m housing units, EGP 7.8bn for financing social housing initiatives, EGP 11bn for health insurance and treating those who cannot afford it at the state's expense while gradually expanding the comprehensive health insurance system. Moreover, EGP 18.5bn have been allocated for drugs and medical supplies, the 100 Million Health Initiative, eliminating waiting lists, raising the efficiency of hospitals, and launching the presidential initiative to increase intensive care beds and nurseries. Maait added that the budget for the new FY includes increasing allocations for wages and workers' compensation to EGP 400bn to improve the conditions of state workers, with the aim of directing the largest part to improving wages for mid-level employees, along with EGP 5bn to appoint 80,000 teachers, doctors, and pharmacists and to meet other needs in various sectors of the state. This is in addition to EGP 1bn to promote state workers and increasing the incentives for faculty members and their assistants in universities, centres, institutes, and research bodies, as well as incentives to develop teachers and increase the personal tax exemption limit from EGP 9,000 to EGP 15,000. Furthermore, the minister said that the government aims to record a real GDP growth rate of 5.5%, achieve a primary surplus of EGP 132bn at a rate of 1.5%, and reduce the total deficit to 6.1% of GDP, compared to a total deficit of 12.5% at the end of June 2016, and put the debt rate on a sustainable downward path to reach less than 75% of GDP over the next four years. It also aims to reduce the debt rate to 84% of GDP compared to 103% at the end of June 2016 and reduce the debt service ratio to 7.6% of GDP, compared to 10%, and 33.3% of budget expenditures, compared to 40% during the past three years. Finally, the government is targeting maximising its efforts to integrate the informal economy into the formal one to expand the tax base and increase tax revenues by about 23.5% from FY 2020/21 by expanding technological solutions to enhance governance and achieve justice.
