Minister of Finance Amr el-Garhy during his speech at the Parliament - Press Photo
CAIRO – 15 April 2018: The Egyptian economic reform program contributed in reducing the unemployment rate by 2.3 percent in three years, Minister of Finance Amr el-Garhy said.
This came during the general session held Sunday in the Parliament, as the ministers of finance and planning presented the financial and analytical statements and the statement of the economic and social development plan for the new financial year 2018/2019.
Garhy clarified that the huge projects established by the government provided job opportunities.
Minister of Planning’s Advisor Ahmed Kamali stated earlier that Egypt needs to provide 700,000 job opportunities to limit the increase of the unemployment rate, and this number should be exceeded to reduce the unemployment rate.
In the same context, IMF Egypt Mission Chief Subir Lall said that Egypt has to offer 700,000 job opportunities annually, noting that this number has to be led by the private sector, in light of the large population growth and the large number of youths.
Lall added that the private sector alone can provide these opportunities through the establishment of small and medium enterprises, and the expansion of existing companies where it is difficult for the public sector to step in.
The minister also referred to the improvement in the purchasing managers index (PMI) as it rose to nearly 50 points due to the enhancement of the economic indicators, in addition to recording a primary surplus of 0.2 percent in 2017/2018, according to his speech.
Egypt’s Emirates NBD Purchasing Managers’ Index (PMI) for the non-oil private sector fell to 49.2 in March, compared to 49.7 in February.
He clarified that it’s the first time to have revenues that exceed the expenditures without the interest rates, which helps in decreasing the public debt.
Trade balance deficit declined 64 percent on a year-on-year basis, due to the rise of Suez Canal revenues and expatriates’ remittances; also, tourism revenues doubled, the minister stated.
He added that the economic growth rate rose 2.5 percent in the first half of 2017, in addition to the reduction of the unemployment rate in the last quarter of 2017 to 11.3 percent through providing job opportunities.
According to the Central Agency for Public Mobilization and Statistics (CAPMAS), the unemployment rates in Egypt slipped to 11.3 percent in the fourth quarter of 2017, compared to 12.4 percent in the same quarter of 2016.
Planning Minister Hala al-Saeed said in March that the construction sector has helped in providing around 3.7 million jobs, representing 20 percent of total workers in the domestic market.
This data matched with what President Abdel Fatah al-Sisi had earlier stated about reducing the rate to 10 percent during the few upcoming years.
Decreasing the unemployment rates requires higher levels of economic growth. Egypt witnessed a growth rate of 5.3 percent in the second quarter of fiscal year 2017/2018, targeting to achieve a rate of 5.8 percent during the next fiscal year, and 7 percent in 2022.
The upcoming budget seeks to lower the unemployment rate to 10.4 percent with an inflation rate of 13 percent.