Staff report The measures taken earlier Saturday to reduce fuel subsidies were urgently needed to maintain stable financial conditions, mainly after the increase in global oil prices, Egypt's Finance Minister Mohamed Maeet has asserted. Global prices of oil per barrel have exceeded 80 dollars, a development that required the state to act to get local prices right, Minister Maeet explained in a statement. Elaborating, the finance minister said that the state has addressed the situation swiftly to forestall any increase in the state budget and an ensuing rise in public debt. The swift move, Minister Maeet said, was necessary for the state to maintain the capability for pursuing economic reforms, funding social protection packages and boosting investment activities. The maintenance of such a capability, the finance minister said, is essential for the realisation of social justice which is a societal demand, especially with regard to increasing expenditures on health, education and public investments, the creation of fresh job opportunities for young people and maintaining the attention that the state is giving to the provision of social housing. The government is treating all such demands and requirements as priorities; hence the need for redirecting the state's financial resources in such a way as to support human and social development, economic reforms and safeguarding the country's financial prospects, Minister Maeet said. Minister Maeet said that the amounts that will be saved from fuel subsidy cuts would be redirected to the boosting of social protection net, developing education and health sectors as well as increasing the pensions and salaries of government employees. The cost of subsidising petroleum products in the new fiscal year (starts on July 1) is expected to show a decrease to LE89.1 billion, compared to 110.15 billion in current fiscal year, Minister Maeet added. The new fiscal year's state budget implies the pursuance of several subsidies' programmes with an aggregate cost of LE334 billion – a move that reflects the continuity of state action to protect the limited-income brackets, he said. In this conext, Finance Minister Maeet noted that bread and basic commodity subsidies would cost the state budget some at LE100 billion. Stressing that the economic reform programme is progressing steadily and is praised by top international financial institutions, Finance Minister Mohamed Maeet indicated in published statements yesterday that Egypt is expected to receive the fourth tranche of the International Monetary Fund's (IMF) loan, next month. Disbursement of the fourth tranche, valued at $2 billion, would be considered by IMF's Executive Board at an upcoming meeting, Minister Maeet said, noting in this regard that the world's top financing institutions, especially including the IMF, the Global Investment Society and world credit rating agencies have acknowledged the steady progress of Egypt's economic reform programme. Egypt received the third tranche of the IMF loan in December 2017. In May, an IMF delegation visited Egypt for several days in a third review of the state's economic reform programme.
