Cabinet reviews Egypt’s economic growth in Parliament

CAIRO – 11 March 2019: The Cabinet handed the Parliament its semi-annual report on the performance of Moustafa Madbouli's government during the first six months of its mandate.

The 140-page report was divided in line with the strategic goals of the government's program, which include protecting national security, Egypt's foreign policy, building the Egyptian citizen, the economic development, raising the efficiency of the governmental performance and improving the living conditions of Egyptians.

The report clarified that the government worked on implementing six main programs to push development growth and raise the efficiency of governmental performance represented in the provision of necessary resources, improvement of public finance management and the development of sectors that affect economic growth , in addition to developing exports, tourism and business environment.

According to the data, Egypt’s economy achieved growth rate of 5.4 percent during first half of fiscal year of 2018/2019, which exceeds the average rate of emerging and developing countries. The report clarified that this growth was backed by the development of all economic activities, especially in sectors of tourism, gas, communications, Suez Canal, infrastructure and constructions.

It also referred that investments and net exports contributed to the growth rate by around 70 percent of achieved growth.

The report noted that Egypt’s growth rate has registered the best levels in more than 10 years despite trade wars that took place around the world and deceleration of investments and trade fields.

Public investments recorded about LE 175 billion during H1 of current fiscal year, with an increase of 11 percent, while government investment reached a growth of 64 percent to hit LE 55.7 billion, where 71 percent out of it was funded by the public treasury.

Regarding inflation, it stated that rates declined to 11.11 percent during December 2018, to record the lowest rate in 33 months, noting that the average rate of inflation decreased to 14.1 percent during the first half of the fiscal year, compared to 30.2 percent during the same period of fiscal year 2017/2018.

As per development projects, the report read that about 1,133 projects with investment cost of LE 311 billion were completed in 20 sectors, including 311 projects in education and health sectors with investment of LE 2.3 billion, and 310 projects in local development with cost of LE 690 million. Also, about LE 22.8 billion were invested in 160 housing projects.

The total budget deficit fell to 3.6 percent during the first six months of 2018/2019, compared to 4.2 percent during the same period of the prior year. This decline helps achieve the targeted rate during the fiscal year 2018/2019 which is 8.4 percent.

The report attributed the decline of the total deficit to structural fiscal reforms in the areas of rationalization and restructuring of public expenditure, and raising the efficiency of tax collection.

As a result of these reforms, tax collection recorded LE 304 billion, and customs collection hit LE 19.9 billion. It also said that around LE 2.8 billion were collected from imposing taxes on 351,400 housing and trading units.

The report also included achieving a primary surplus of 0.4 percent of gross domestic product (GDP) worth LE 21 billion for the first time in more than 10 years, compared to 0.3 percent of GDP during the same period of the previous year.

Regarding sectors, it noted that information technology and communication sector achieved a growth of 17.4 percent during the first half of 2018/2019, and attracted foreign investment of $63.8 million.

Revenues of Suez Canal hit LE 51.8 billion through passing 9,368 ships with loads of 591 million tons.

Moreover, the report stated that non-petroleum commodities’ exports reached $11.8 billion during the first half of the current fiscal year.

MENA contributed to this story