Egypt remains able to meet its financial obligations on time, despite the Covid-19 outbreak, Minister of Finance Mohamed Moeit told the parliament’s budget and planning committee on Tuesday. The meeting discussed the draft budget for fiscal year (FY) 2020/21.
“Egypt is able to meet all domestic and foreign financial obligations, which confirms the strength of the national economy,” Moeit said.
He noted that recent international economic reports have placed Egypt at a very advanced level among the economies that have not been affected much by the ongoing crisis.
Any potential postponement of financial obligations, however, must be through regional and international movements, and Egypt is willing to support such efforts, Moeit explained.
He said the draft budget will be affected by the coronavirus pandemic, especially with regard to revenues, growth rates, and expenditures.
The draft budget has been prepared in the period from September 2019 to January 2020, and “things were proceeding in a positive and ambitious manner at the time, but the emergence of the coronavirus has changed all targets in this budget.”
Hence, the Ministry of Finance had two options, either to make fundamental amendments to the budget, which means missing the constitutional deadline for its submission to the parliament, or to keep the draft budget unchanged until the coronavirus situation is clarified, Moeit disclosed.
The draft budget was expected to achieve a primary surplus of 2%, but this amount is expected to drop to only 0.6% due to the ongoing crisis, he added. The government was targeting 6.2% deficit, but it is expected to rise to about 7.8% if the crisis persists until December.