Minister of Finance Mohamed Maait announced that the government seeks to reduce the debt-to-GDP ratio to less than 90% by the end of FY2021/22 and to 85% by 2025.
This came in a virtual meeting with representatives and investors of The Bank of America Symposium that was held last week.
“We succeeded in achieving a strong growth rate of 90% of GDP in the first half of the current FY despite all the negative repercussions of the coronavirus pandemic, including the disruption in supply chains, a sharp inflationary wave, and high prices of goods and services,” Maait said.
“We aim to achieve a growth rate of 5.7% of GDP by the end of the FY this June in light of the severe global economic effects that most of the world’s economies are suffering from as a result of the current Russian-Ukrainian conflict.”
He added that despite all the successive global economic challenges, a primary surplus of 1.3% of the GDP is targeted, along with a budget deficit of less than 6.2%.
“We are keen to continue the development and mechanisation operations that the various sectors of the ministry are witnessing to modernise the state’s public financial management systems and enhance the governance of the expenditure and revenue system. This should contribute to raising the efficiency of tax collection, expand the tax base, improve public spending, and maximise the use of state resources,” he said.
He also pointed out that tax revenues increased by 13.6% during the period from July to February of FY2021/22, expressing hope that this percentage would increase by the end of the FY.
Furthermore, the minister stressed that the finance ministry took into account the current global economic challenges in the budget for FY2022/23. The government announced a package of social measures to support societal groups most affected by economic fluctuations, as EGP 2.7bn were allocated to include half a million families for beneficiaries of the ‘Takaful wi Karama Initiative’s’ umbrella, as well as increase the periodic and special bonuses for state workers, along with pensions to be disbursed in April instead of the beginning of the new FY.
This is in addition to raising the personal tax exemption limit from EGP 9,000 to EGP 15,000, bringing the total tax exemption limit to EGP 30,000, which means that incomes up to EGP 2,500 per month are tax-exempt.
He also pointed out that there is a reassuring level of public reserves in the budget for the current and next FYs through which the ministry can deal flexibly with the severe global price fluctuations for most basic commodities witnessed by international markets and reduce the burdens on citizens as much as possible.