The Egyptian Finance Ministry announced on Friday that the government is targeting the budget for the fiscal year 2019/2020 with plans over the next three years to gradually reduce the government debt rate to GDP.
A ministry statement projected that government debt would reach 77.5 percent by the end of June 2022, allowing debt service burdens to be reduced and more resources to be spent on human development requirements, such as education and health.
This will also support growth rates, creating more jobs and eventually improving the standard of living for citizens.
The statement added that the government has succeeded in reducing the debt ratio from 108 percent at the end of June 2017, to 98 percent at the end of June 2018, then down to 90.5 percent at the end of June 2019 and projected to reach 82.5 percent at the end of June 2020 and 77.5 percent at the end of June 2022.
This will put Egypt in the safe range according to international estimates and standards, the statement read, and comes in line with an integrated strategy approved by the government to maintain the sustainability of the low debt ratio and the achievement of the primary surplus and high growth rates.
According to the Ministry, the government is working to achieve annual growth rates not less than six percent on average, and a sustainable primary annual surplus in the range of two percent until the fiscal year 2021/2022 by building on the success of the economic reform program, and the continuation of structural reforms.
The fiscal year 2021/2022 will see the government debt to GDP ratio drop below the level that existed before 2011, the ministry said.
The ministry said that this gradual reduction in the debt rate will lead to a significant improvement in the sustainability of public finances, raising its ability to deal with any changes in the macroeconomic indicators, both domestic and global, and contributing to increasing the competitiveness of the economy by reducing interest rate pressure.
Edited translation from Al-Masry Al-Youm