Egypt’s economy succeeded in dealing with shocks throughout FY2020/21: Finance Minister

Daily News Egypt
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Minister of Finance Mohamed Maait said that the results of the budget of FY2020/21 — which were presented and approved by the House of Representatives on Tuesday — indicated the success of the Egyptian economy in dealing flexibly with internal and external challenges and absorbing global shocks.

He explained that the Ministry of Finance managed to maintain the financial and economic performance targets and the downward path of the budget deficit and debt rates of the GDP.

Maait also said that his ministry is committed to coordinating with the concerned authorities to implement the recommendations of the Plan and Budget Committee in the House of Representatives and the observations of the Central Auditing Agency for FY2020/21.

The minister added in a statement on Wednesday, that a primary surplus of 1.46% of the GDB was achieved, which was used to finance part of the interests of the public debt. This contributed to reducing the total deficit to 7.4% of GDP.

He also pointed out that the volume of public spending on social dimension programmes increased in the FY2020/21 budget, which led to an increase in total expenditures for the last fiscal year by 10% to record EGP 1.6 trillion.

Maait explained that the results of the final account of the budget of the last FY reflect the bias of the political leadership to the most favoured groups by adopting social dimension policies, as public spending on wages and workers’ compensation increased to EGP 318.8bn, compared to EGP 288.8bn in FY2019/20 — a growth rate of 10.4%.

Furthermore, expenditures on subsidising food commodities increased to EGP 83bn, compared to EGP 80.4bn in FY2019/20 — with a growth rate of 3.2% — and actual spending on the social protection sector increased by 16.5% over FY2019/20.

He also pointed out that the state’s public treasury committed — despite the repercussions of the coronavirus — to pay EGP 170bn in the annual premium to the National Social Insurance Authority as part of an agreement to resolve entanglements with the Ministry of Social Solidarity.

This was done to pay the dues of insurance funds that accumulated over half a century in light of Social Insurance and Pensions Law No. 148 of the year 2019. This will ensure the provision of the necessary financial liquidity to serve pensioners, their beneficiaries, and the insured, as well as fulfil all obligations towards them.

Additionally, the minister said that actual spending on the health sector last FY amounted to EGP 107bn, compared to EGP 87.1bn in FY2019/20 —a growth rate of 22.8%. Spending on the education sector also increased by 9.3%, reaching EGP 158.7bn, compared to EGP 145.2bn. Furthermore, public investments increased by 30.1% to reach EGP 249.4bn, compared to EGP 191.6bn.

He also pointed out that last FY witnessed an increase in public revenues in its various sectors, as tax revenues amounted to EGP 834bn, compared to EGP 739.6bn in FY2019/20 — a growth rate of 12.8% — as a result of the efforts made to modernise and mechanise the tax and customs systems, expand the tax base, and strive towards achieving tax justice, reducing tax evasion, and settling tax disputes. He noted that non-tax public revenues also increased to EGP 271.7bn with a growth rate of 17.8%, compared to EGP 230.5bn in FY2019/20.

For his part, Kamel Kamal — Head of the Final Accounts Sector at the Ministry of Finance — confirmed that the results of the final accounts of the economic bodies led to an improvement in their financial performance.

The surplus to the public treasury increased by 16.3% over FY2019/20, led by the Suez Canal Authority. This surplus recorded EGP 28bn last FY, compared to EGP 18bn in FY2019/20 — a growth rate of 53%.

He also pointed out that the final account of the last FY reflects Egypt’s growing ability to pay the burden of public debt and its success in reducing the growth rate of public debt interest by 0.5%.

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