Expert points to economic deterioration under Morsy

An economist has brought attention to a remarkable increase in the foreign debt, rate of unemployment, and rate of poverty in Egypt as President Mohamed Morsy completes his first year in office.

Less than one year into Morsy’s presidency, Egypt’s foreign debt has vaulted from US$34.4 billion to US$45.4 billion, according to Ahmed al-Sayyed al-Naggar, a director and economist at the state-run Al-Ahram Center for Political and Strategic Studies.

Egypt’s domestic debt has jumped from LE1,238 billion to more than LE1,520 under President Morsy, Naggar said Sunday in a post on his Facebook page.

Naggar alluded to the Ministry of Finance’s intent to borrow US$10 billion a year through the new Islamic bond (sukuk) system. “The current general budget permits [Morsy] to borrow LE312 billion to cover his government’s failures and its adoption of the old, inefficient policies of the former regime. This debt will make Egypt vulnerable to financial, economic, and social disaster.”

Naggar slammed the 2013-2014 budget, which will reduce spending on healthcare from 5 percent to 4.7 percent. He argued that this rate is much lower than the 15% standard recommended by the World Health Organization.   

The rate of unemployment has increased from 12.5 percent to 13.2 percent under Morsy. The poverty rate rose from 22 percent to more than 25 percent, according to Naggar.

He added that Morsy has reduced spending on education from 5.2 percent to 4 percent of GDP, or LE25 billion less support than he had pledged in a campaign promise.

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