The Egyptian Council of Representatives approved the draft «State Budget» for the year 2019 2020 with a budget of almost one third to pay interest only loans, targeting a deficit rate of 7.1% of GDP, at a time when the Minister of Finance, Mohammad Maith, New agreement without loans with the «International Monetary Fund».
The budget will start work next month, which is one third of its expenses to the benefits that will be paid in the amount of 569.1 billion pounds ($ 100 = about 1700 pounds) and 375 billion pounds are the installments of debt and loans to be paid. This comes amid a total expenditure of LE 1.574 trillion against revenues of 1.1 trillion, which means the ability to cover 72% of expenditure and a high cash deficit that the state will attempt to cover with loans to reach 7.1% of GDP.
Minister Maith predicted that growth rates would close to 6% in the next fiscal year, in addition to "reducing inflation rates for a single figure in coordination with the central bank." Government investments financed by the public treasury increased by 40% to 140 billion pounds , At a time when the budget of the Ministry of Health increased by only 11.2 billion pounds to record 73 billion, while the State increased allocations for education by only 16.4 billion pounds, to record 123 billion.
Parliament and the government have both promoted the new budget as "the largest" as a result of the increase in the allocations of a number of programs with a social dimension, such as wages of workers in the administrative apparatus of the state, which amounted to 301 billion pounds (an increase of 31 billion) in implementation of the President's decision to raise the minimum wage from 1200 pounds to 2000 Monthly, in addition to financing the promotion movement at a cost of 1.5 billion pounds, and grant all workers in the state periodic allowance minimum of 75 pounds per month, and the adoption of 150 pounds as a «monthly incentive» to take into account the conditions of junior staff.
In a related context, an informed statement that the government is negotiating with the IMF a new agreement without loans expected to be signed in October, pointing out that «Finance» is exploring the programs of the Fund that apply to Egypt after the end of the loan agreement of 12 billion Which will receive the country's last slice in the coming days. The new program "comes in support of boosting the growth and structural reforms adopted by the Egyptian government, as well as its importance in giving investors the necessary confidence in the Egyptian economy and ensuring the continuation of current economic policies," the minister said.
The announcement of the new agreement coincides with what has been announced by Assistant Maait, when he said that the new agreement will make Egypt receive between 6 and 8 technical missions of the Fund during the new fiscal year, while the government seeks to collect between 4 and 7 billion dollars of several mechanisms; International bonds, including bonds, will be issued in currencies other than the pound for the first time. The government is working to reduce the target deficit by 100 billion pounds by extending the maturity of some bonds, in addition to raising between $ 250 million and $ 500 million in green bonds. Similar amounts are expected to be raised by the Japanese yen (Samurai) and the Chinese panda (Panda), a move that is still awaiting cabinet approval in the coming weeks.