Mon, 24 May 2021 - 11:05 GMT
FILE PHOTO: Egypt's Finance Minister Mohamed Maait gestures during a news conference in Cairo, Egypt July 17, 2019. REUTERS/Amr Abdallah Dalsh/File Photo
CAIRO – 24 May 2021: Gross domestic product (GDP) of the Egyptian economy in the current fiscal year 2020/2021 is expected to reach LE 6.4 trillion, according to Minister of Finance Mohamed Maait.
Maait clarified Monday that this comes as a result of the expansion of development investments that reflect the success of the state, in achieving a balance between preserving the health of citizens and turning the wheel of the national economy.
He confirmed that the economic gains achieved by Egypt pushed the government to complete the development march, and to proceed with the implementation of structural reforms to strengthen the structure of the national economy.
The Egyptian minister said in a statement, that the reforms contribute to maximizing efforts to improve the lives of citizens and raise the level of services provided to them, in a manner consistent with the unprecedented national projects aimed at providing a decent life for Egyptians.
Maait added that the continued praise of international financing and rating institutions attracts new investments and provides more job opportunities for young people, and leads to the localization of advanced global industries and modern technologies, raising our production capabilities, expanding the export base, and enhancing the competitiveness of Egyptian products in global markets.
“The international rating agencies (Moody's, Fitch, Standard & Poor's) decided to fix the credit rating of Egypt with a stable outlook in light of the Corona crisis, and Egypt came among the best countries in the world in reducing the debt by 20 percent within 3 years despite the pandemic, " he clarified referring that IMF’s Manager described Egypt as a successful model in economic reform.
He mentioned that the Standard & Poor's Corporation had expected a strong contribution from government and private investments to achieving sustainable growth rates of about 5.3 percent in the medium term during the period 2022-2024. Fitch also expected the Egyptian economy to grow by about 6 percent during the upcoming fiscal year, and the "African Economic Outlook 2021" report also predicts that Egypt will restore, during the year 2022, pre-corona growth rates to record 4.9 percent.
The minister pointed out that the American Goldman Sachs Corporation, one of the largest financial institutions in the world, described Egypt as one of the few countries that succeeded in controlling inflation rates, while the upward trend of major inflation rates continued in most countries of the world since the beginning of 2021, explaining that the institution « Standard & Poor's »maintained the credit rating of Egypt for three consecutive times since the start of the pandemic.
Capital Intelligence recently maintained Egypt's credit rating at the level of “B +” with a stable outlook. Fitch has praised the state budget project for the new fiscal year for adopting widely credible goals that enhance the government's fiscal and economic reform agenda, and reduce the debt burden in the medium term.
The minister emphasized that the measures taken by Egypt to control spending during the past years had a great impact on achieving financial savings, which contributed to avoiding economic downturns, completing the policy of structural reforms, controlling inflation and unemployment rates, and providing foreign exchange reserves with the banking sector amounting to about $ 40.3 billion by the end of last April.
Maait said that Egypt joined the watch list in the J.P.Morgan Emerging Markets Bond Index Global ("EMBI Global"), as a prelude that the Egyptian government debt instruments in the local currency to join the index, which reflects the Ministry of Finance's continuous efforts to reduce the cost of public debt as part of the package of measures taken by the state for economic reforms.
He pointed out that Egypt's accession to this index reflects its seriousness in meeting the bank’s requirements, including: extending the life of the government debt, adjusting the “Yield curve”, and raising the participation rate of foreign investors in government financial instruments with an increase in the size of each issue.
Maait added that Morgan Stanley for Financial, Investment and Banking Services, in its latest report issued last February, placed Egyptian debts in the best credit rating for developing countries in debt, according to the positive results of the criteria for measuring the level of risk in debt repayment, which highlights the state’s ability to control In its debts and access to debt markets, and the volume of financing flows that come to it from abroad.
He pointed out that the Fitch report expected a decrease in the total deficit to 6.7 percent of GDP by the end of June 2022, compared to 7.9 percent at the end of June 2021.
He indicated that the International Monetary Fund (IMF) had raised its estimates of the growth rate of the Egyptian economy for the next fiscal year 2021-2022 to record 5.7 percent, compared to 5.5 percent in its previous report issued last January.
The fund also expected an acceleration of the rate of growth to achieve 5.8 percent in the fiscal year 2025/2026, and a decrease in the rate of inflation during the current fiscal year to 4.8 percent, compared to 5.7 percent in 2019-2020, while increasing regional economies to reach 12.4 percent, reflecting the ability of the Egyptian economy to recover quickly from the negative repercussions of the coronavirus pandemic.