Egypt’s government is working on slashing the budget deficit to 8 percent of gross domestic product (GDP) in the coming four years, Youm7 quoted Minister of Investment Ashraf Salman Sunday.
Budget shortfall amounted to an estimated 14 percent of GDP for FY 2014-2015, before President Abdel Fatah al-Sisi ratified a revised and tightened budget in which the deficit was reduced from 292 billion EGP in the initial budget draft to 240 billion EGP (10 percent of GDP) compared to a 12 percent of GDP deficit for FY 2013-2014.
“Egypt has benefitted from the recent dip of oil global prices, which saved around 30 billion EGP. The amount will be allocated to health, education and infrastructure,” Salman said at a news conference held in Cairo Sunday.
Salman added, “We are [the government] targeting 7 percent growth rate in the coming four years.”
In its economic development plan for 2014/15, the government said it is targeting a 3.2 percent growth as the economy has begun to recover from a dramatic slowdown triggered from political upheaval following the January 25 Revolution.
The World Bank forecasted in its January Global Economic Prospects report that Egypt’s economy is expected to grow by 2.9 percent during the current FY (2014/15), up from a 2.2 percent growth during the previous FY.
“Egypt especially benefited from greater stability and large-scale financial support from the GCC for investment programs. As a result, industrial production rebounded sharply and the purchasing managers’ indexes (PMIs) indicated marked improvements in confidence,” the organization said in the report.
According to the report, investors’ interest in Egypt increased as the economy has began to recover, and GCC support helped ease a shortfall of foreign reserves.