Finance Minister Ahmed Galal announced at the Ninth Money and Finance Conference that amendments are to be expected in the state’s general budget for the current fiscal year, on Monday, September 30.
Galal said that these amendments aim to accommodate the latest economic and financial developments the country underwent after 30 June, referring to the $12bn in aid Egypt has received from several Gulf countries.
The minister added that the 4% decline in interest rates on treasury bills and bonds will result in a significant reduction of the debt owed to the public, relieving a considerable portion of the burden on the government budget.
Galal also stated that the upcoming period will witness the revision and implementation of the new sales tax laws that were passed, but was not imposed, during the term of the previous government.
Galal stated that the government plans to set the minimum wage at EGP 1200, stressing that the main objective of the law is to improve the living conditions of workers and achieve social justice.
In his latest announcements, Galal stated that after the passing of the minimum income law, budget deficit is expected to drop to 10% during the fiscal year of 2013/2014, compared to the 9.1% goal that was set earlier.
The income wage, however, received criticism from labour activists, economists and several syndicate members.
Heba Khalil, head of economic research at the Egyptian Centre for Social and Economic Rights (ECESR), told the Daily News Egypt: “We need to have a clear understanding on what this number represents. Our demands in 2009 and 2010 were for a EGP 1,200 minimum wage [rather than minimum income], but nowadays, and after almost three or four years, with these exceptionally high rates of inflation, this number needs serious revision.”
During the conference, Galal added that he contacted Moody’s, the international credit rating energy, which downgraded Egypt’s credit rating several times, requesting that the agency takes into account the positive economic changes when preparing its final ratings report.
Earlier in July, Moody’s affirmed Egypt’s Caa1 rating, the sixth downgrade since January 2011: “The maintenance of the negative outlook on Egypt’s Caa1 rating is driven by Moody’s view of the country’s considerable economic and political challenges.”
The global research company also reported on 19 August that the market-based risk in Egypt has deteriorated following recent crackdowns on sit-ins by government authorities.