Mostafa Mahmoud - Amwal Al Ghad
Dr. Mohamed Maait, Minister of Finance, affirmed that Standard & Poor’s decision to keep Egypt’s credit rating in both local and foreign currencies unchanged at the “B” level, while also maintaining the stable outlook for the Egyptian economy, “Stable Outlook”, for the second time in three years. Months, it is a new international certificate of confidence that the Egyptian economy is beginning to recover from the repercussions of the exceptional global and domestic economic conditions during the past year, in which the repercussions of the war in Europe are intertwined with the negative effects of the Corona pandemic.
And he continued: “We have succeeded in dealing with these global conditions with balanced and integrated decisions and reforms, reflecting full coordination between the government and the Central Bank in all matters; To ensure the stability of the economic situation, and that the future of our economy is stable, in light of commitment to the pace of economic reform supported by the International Monetary Fund, with an agreement that extends to 48 months.
This allows for prospects for economic growth in the coming years, and enhances the ability to obtain sufficient financing to meet the country's external needs, explaining that we are implementing a national economic reform program to ensure the stability of economic conditions, maintain financial discipline and increase the competitiveness of the Egyptian economy.
The Minister of Finance added that the “Standard & Poor’s” institution highlighted in the context of its latest report, published yesterday, Thursday, its expectation to continue achieving financial discipline during the current fiscal year, in order to complement what was achieved in the past years, including the fiscal year 2021/2022, when the total deficit reached 6.1%. of GDP, down from 6.8% in the year 2020/2021, and achieving a primary surplus for the fifth year in a row amounting to 1.3% of GDP, in the fiscal year 2021/2022, pointing to the strong growth in government revenues due to the expansion of the tax base thanks to large-scale mechanization measures. that are applied to improve tax administration.
The minister indicated that the report praised the government's efforts to rationalize expenditures and expand the social protection network and programs adopted by the Ministry of Finance, to mitigate the effects of the global crisis. Standard & Poor's expects that over the next three years, the economic growth rate will average about 4% annually, Mainly driven by strong growth in the construction and energy sectors, along with continued strong growth in sectors such as information and communication technology, wholesale and retail trade, manufacturing, agriculture and health.
The minister explained that the report indicates expectations of a decline and decrease in the value of the current account deficit in nominal terms during the coming period until 2026 in light of the support and support through the flexibility of the exchange rate regime in use and its positive impact on increasing the competitiveness and the proceeds of Egyptian commodity and service exports, in addition to the strong performance of the sector’s revenues. Tourism and petroleum exports, especially natural gas, whose monthly revenues have recently reached about $700 million a month.
The report also referred to the 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 of 29% annually, in light of the increase in exports of fertilizers, medicines and ready-made clothes. A large surplus was also achieved on the side of the oil trade balance 4.4%. billion dollars in light of the expansion of natural gas exports.
The minister indicated that the report praised the Suez Canal’s achievement of revenues that are considered the highest historically, amounting to $7 billion, and it is expected to reach $8 billion during 2023.
He pointed out that the revenues of the tourism sector increased significantly during the past year in light of the recovery of the sector, which achieved revenues of $ 10.7 billion, with the diversification of tourism sources to witness strong inflows from various markets such as the Gulf countries, Germany and Poland, and the increase in the proceeds of foreign direct investment by 71% to achieve about 9.1 billion. dollars, compared to about $5.2 billion in the previous year.
In addition to the diversification of foreign investment sources flowing to many sectors, the most important of which are: manufacturing industries, construction and building, communications and information technology.
Ahmed Kajouk, Deputy Minister for Financial Policies and Institutional Development, said that Standard & Poor's, in its report, dealt positively with the importance of issuing a state ownership policy document, and stressed that it reflects the desire of the state and its institutions to encourage and attract the private sector to increase its investments and its strong presence in the Egyptian market and enhance its contribution to the sector. Strong economic growth in the coming period.
He added that the country aims to attract foreign direct investments annually by about $10 billion over the coming years, while continuing to push efforts to develop the proceeds of commodity exports to reach $100 billion, and increase the revenue of the tourism sector to $30 billion annually, pointing out that these ambitious goals can be achieved in In light of the huge investment opportunities in the Egyptian economy.
He pointed out that “Standard & Poor’s” indicated in the context of its report the possibility of improving Egypt’s credit rating during the coming period if the economic expansion in Egypt is high and strong, and if the national economic reform program implemented during the coming period is able to attract more external flows and achieve a decrease Significant in government debt levels as a percentage of GDP, in addition to the ability to obtain sustainable external financing in light of the difficult international economic conditions during the coming period.
