Page 16 - issue 29 En

ELITE ISSUE 29, MARCH 2021

Minister of Finance adresses

Economics Department Seminar
author's name & details

Written by Anthony Goubriel , Translated by Yasmin Tarek and Clarinda Sherif
COVID-19 maintains to threaten the world's economies, causing decrease in customs taxes by 8.8%, but the decision to retreat is
countless imbalances in various markets, which the countries have not solely conducted by the Ministry of Finance.
rectified. Therefore, countries used their financial and monetary On the other hand, the absolute value of expenditures increased
policies to limit coronavirus impact, and to ensure that the by 9.6%, without an increase in the ratio of expenditures to
slowdown in economic growth does not turn into a continuous GDP. This increase came within the context of stimulating and
economic crisis. From a national perspective, what makes the state supporting the economy, as this increase in expenditures was
of Egyptian economy more difficult is increasing the state’s divided into the two sections to “wages and compensation of
expenditures to correct these imbalances while achieving the workers” with a growth rate of 8.7% and to “support, grants and
objectives of the economic reform program. social benefits”, with a growth rate of 21.5% on the most
Consequently, under the auspices of Prof. Dr. Mohamed Othman important social protection programs. On the contrary, the state
El-Khasht, President of Cairo University, and Prof. Dr. Mahmoud rationalized its spending on the less necessary parts at the
Al-Saeed, Dean of the Faculty of Economics and Political Science, present time, and also decreased spending on debt interest
a scientific seminar was organized by the Department of thanks to the low interest rate and the Ministry's work to extend
Economics’ professors. The seminar was entitled "A Reading in the the life of the debt, which reached an average of 3.3 years after
Egyptian General Budget 2020/2021 in the Light of Ongoing it was only 1.3 years. At the same time, he minister indicated
COVID-19", in which the Minister of Finance, Prof. Dr. Mohamed that the interest was the ministry's biggest challenge, and if the
Maait, explaining how Egypt dealt with that crisis. market determined a high interest rate - such as the current price
The Minister explained that the ministry achieved a primary budget
surplus of about 14 billion Egyptian pounds, as the revenues of treasury bills: 13.5%, then the government would have to
exceeded the expenditures for this year. More specifically, the state allocate a greater part of its resources to cover those benefits at
revenues increased by 16% in July-December 2020/2021, the cost of the rest of the expenses.
furthermore, he added that the real percentage is higher than the Yet, the overall deficit ratio of GDP is still high, reaching 7.8%
official figures. Although many sectors recorded negative revenues instead of 6.3%, due to the decline in state revenues caused by
due to COVID-19, such as the tourism sector that lost 14 billion the outbreak of the Coronavirus. Despite this, the ministry seeks
dollars and the civil aviation, tax revenues were the main to put that percentage on the descending path. Even if the
component of that growth, reaching 334 billion Egyptian pounds, ministry does not reach the target percentage, it will exert all of
with a total growth of 10%. As the tax authority's revenues its effort so that the index does not change from its descending
increased by 14.2% while the tax revenues from the sovereign path.
declined by 4.9%. The Minister indicated that the Ministry seeks to The Minister explained that the government has established a
increase tax revenues more by increasing employment rates, general framework that is characterized by four main pillars:
developing the tax authority, and automating tax procedures, • First, dealing with the crisis in stages, quickly and effectively,
instead of raising tax brackets. The Minister also mentioned his with the aim of ensuring the stability of the economic situation
desire to review many Foreign Trade agreements Egypt member in without compromising the gains from the economic reform
that led to a program.

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