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Budget deficit at 6.3%, expected to reach 7.5% amid COVID-19: Finance Minister - Daily News Egypt

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Budget deficit at 6.3%, expected to reach 7.5% amid COVID-19: Finance Minister

Constant monitoring of situation needed, particularly for annual budget which was prepared in pre-pandemic period, says Maait

Egypt’s budget deficit has reached 6.3%, and is expected to increase to 7.5% on the back of the ongoing coronavirus (COVID-19) pandemic, according to Minister of Finance Mohamed Maait.

The minister added that pre-pandemic budget deficit predictions had initially been anticipated to reach 5% or less during 2021 and 2022,.

During a “What’s Next? Egypt’s Finances Post Covid-19” webinar, held by the British Egyptian Business Association (BEBA), Maait noted that debt-to-income has reached 86%-87%.

The minister pointed out that despite current indicators, Egypt is expected to achieve a strong return to make it the only country that has achieved growth in the region.

Maait stressed that many vital sectors have been affected by the global coronavirus crisis, especially those that contribute significantly in hard currency revenues, such as tourism, aviation and Suez Canal trade.

At the same time, the government was forced to direct urgent allocations to some sectors, such as education, which was not part of the initial plan, Maait noted. The state has allocated EGP 5bn to education, especially to cover precautionary measures for the Thanaweyya Amma exams in light of the pandemic.

Maait said the current situation needs to be reviewed and evaluated on an almost daily basis, which is currently being undertaken by the Ministry of Finance and the Egyptian government.

This is particularly necessary regarding the annual budget that was prepared in the period before the pandemic, between September 2019 and February 2020 and finalised in March 2020.

Maait said, “We are working on reviewing it according to developments and changes, then we make discretionary assessments of the current period.”

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