Finance Minister Mohamed Maait confirmed that the growth rate of the Egyptian economy will reach 6.5% following the corona crisis.
Maait explained that Egypt is the only country in Africa and the Middle East that was able to maintain its stable outlook for international rating agencies, including Fitch, Moody’s, Standard & Poor’s (S&P 500).
Maait said, “When the economic reform phase began, the volume of debt on June 30, 2017 reached 108% of the value of the gross domestic product (GDP), explaining that the plan was to bring the debt rates to the safe stages, below 80%.”
Maait added – in his speech during the inauguration of a number of national projects in the Alexandria governorate in the presence of President Abdel Fattah El-Sisi – “Our plan was for the debt in the current fiscal year was to reach 79%, and indeed the size of the debt became 98% on June 30, 2018, then 90.4% on 30th. June 2019, and our plan on June 30, 2020 was to bring the debt to 83%.
He continued,“ Our calculations before the corona crisis were indicating the size of the debt would reach 82% of GDP, yet, as the pandemic hit global economies, entire sectors stopped, headed by tourism, and the size of the debt reached 87% and growth recorded 3.6% instead of the estimated 6%.”
The minister explained, “The whole world has debts, but our issue is production and the domestic product. The world does not look at the size or the value of the debt but, at the percentage of debt from GDP.”
Maait stressed that in the absence of the corona pandemic, the country would have reached the target growth, and debt ratio would have dropped from 108% to 82% of GDP, explaining that no country in the world has succeeded in achieving this level.
He said, “With the reform plan and the size of the growth, we achieved an initial surplus of 2%, as we succeeded in covering out expenses from our revenues. All the estimates of international institutions indicated that during the crisis we will only achieve 1.3% as a primary surplus, yet, we recorded 1.8%.”
Maait pointed out that financing growth must be absorbed, saying, “We face with two options. The first is to achieve growth through borrowing, and the second is not to achieve growth.. We borrow to achieve growth and we continue building out country’s infrastructure through building new roads, bridges, sewage networks, and solving intractable problems.”