Egypt forecasts economic growth of 5.4% in 2021/22

CAIRO: Egypt is forecasting economic growth of 5.4 percent in the next fiscal year 2021/2022, up from 3.3 percent expected in 2020/2021, according to the Egyptian Minister of Planning Hala Al-Saeed.

The Egyptian Cabinet approved the draft budget for the next fiscal year 2021/2022, which was presented by Finance Minister Mohamed Maait and will be submitted to parliament.

The finance minister said that the budget aims to reduce the country’s deficit and targets a growth rate of 5.4 percent of GDP. This will result in a surplus of about 1.5 percent of GDP, compared to estimates of a surplus for the current fiscal year of about 0.9 percent of GDP.

The minister explained that the goals included support for economic activity — especially the industrial and export sectors — and an initiative for cash payment of arrears to exporters, support for programs for exporters, and a national project to switch vehicles to run on natural gas instead of diesel and gasoline.

Maait expected that the proceeds of budget revenues would reach about 1.3 trillion Egyptian pounds ($80 billion), according to estimates for the next fiscal year 2020/2021, compared to expected revenues of 1.117 trillion Egyptian pounds during the current fiscal year.

The estimates reflect an annual growth in revenues of 16.4 percent, achieved by expanding the tax base, activating electronic payments, expanding the use of modern methods of risk management, collecting government revenues and working to increase linking the proceeds to economic activity.

The budget also focuses on pushing social protection efforts, improving citizens’ standard of living, increasing wage allocations and rewards for workers, and financing grant incentives and transportation allowances for workers transferred to the New Administrative Capital.

Work is underway to increase the incomes of more than 10 million pensioners and to provide the necessary allocations to support food commodities, to finance the Takaful and Karama program, and the national project for the development of the Egyptian countryside within the Decent Life Initiative.