Members of parliament said they expect the allocations for the repayment of debts to rise to EGP 400bn, compared to the EGP 294bn targeted by the Ministry of Finance.
They noted that the government will aim to reduce the public debt, as the Ministry of Finance aims to reach a 9.8% total deficit of the GDP.
MP Yasser Omar of the parliament’s Planning and Budget Committee said that the government has been the biggest borrower from the banking sector in order to finance the budget deficit.
The public debt rose at the end of June to EGP 2.6tr, up from from EGP 2.1tr in the same period last year.
External debt had risen during the same period to $55.8bn, up from $48.1bn.
MP and member of the parliament’s Economic Affairs Committee Talaat Khalil said that overall deficit is expected to go beyond 13%.
He, however, praised the move of floating the Egyptian pound. “It is the bitter medicine,” he said. “It will have a negative impact, but will be beneficial in the long run if the government improves macroeconomic indicators and bridges the budget deficit.”
He noted that the government may resort to cutting subsidies to face of the problematic public debt.
The government aims to obtain a loan from the International Monetary Fund worth $12bn over three years, on $4bn per year basis.
Khalil said that the government must begin immediately to protect citizens amid the rising prices.
Another member of the parliament’s Economic Affairs Committee, Ahmed Farghaly, said that liberating the exchange rate now was a “big mistake”. He said that the exchange rate was heading towards better security.
He added that the government is the largest importer of goods, which will have negative impacts on the cost of goods and will contribute to increasing public debt and raising prices on the market.