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Cairo, April 22 / Dr. Mohamed Moait, the Egyptian Minister of Finance, confirmed that the Egyptian government will implement a package of financial, monetary and structural measures to deal with concerns related to the high external financing needs of the Egyptian economy, which prompted the “Standard & Poor’s” institution to amend the outlook for the Egyptian economy from stable to negative and According to its estimates, it amounts to about $17 billion during the current fiscal year and $20 billion during the next fiscal year 2023/2024.
Maait said – in a statement issued today – that Standard & Poor’s decision to keep Egypt’s credit rating in both local and foreign currencies as it is at the level of “B” while adjusting the outlook from stable to negative as a result of pressures related to foreign transactions, comes in light of the exposure of the Egyptian economy. Difficult external pressures, the most important of which are the repercussions of the Ukrainian crisis and the subsequent negative economic repercussions globally, including the unprecedented wave of inflation, pointing out that the Egyptian government provides financial support to the groups most affected by the current inflationary pressures.
The Egyptian minister made it clear that Standard & Poor’s highlighted the continued achievement of fiscal discipline, which was largely evident during the results of the previous fiscal year 2021/2022, after the total deficit reached 6.1% of GDP, down from 6.8% of GDP. In the fiscal year 2020/2021 in light of the Corona pandemic, and achieving a primary surplus for the fifth year in a row, at 1.3% of GDP.
He pointed out that the report highlighted the strong growth in government revenues due to the expansion of the tax base despite the economic conditions as a result of the large-scale mechanization measures that are being applied to improve tax administration, in addition to efforts to rationalize expenditures and expand the social protection network.
The Egyptian minister noted that the report indicates expectations of reducing the current account deficit in nominal terms during the coming period and until 2026, as the flexibility of the exchange rate regime will support Egyptian exports, amid a strong performance of petroleum export revenues, especially from natural gas, which recently reached $700 million per month. It is noticeable that there is a significant improvement in the indicators of the current balance for the fiscal year 2021/2022, as the proceeds of non-oil exports achieved a remarkable increase by 29% annually, in light of the increase in exports of fertilizers, medicines and ready-made clothes.
He pointed out that a large surplus was also achieved on the petroleum trade balance, amounting to 4.4 billion dollars, in light of the expansion of natural gas exports. The year 2023, in addition to the growth of tourism revenues.
He noted that the remittances of workers abroad continued to achieve a high proceeds during the past year, amounting to about 33 billion dollars, and the increase in the proceeds of foreign direct investments by 71%, to achieve about 9.1 billion dollars, compared to about 5.2 billion dollars the previous year, in addition to the diversification of sources of foreign investments flowing to many Among the sectors, the most important of which are manufacturing industries, construction, communications and information technology.
