Several economic experts have warned against surpassing the safe limits of the accumulated interest on public debt.
The local and foreign debt ratio will have reached around 94 percent of the gross domestic product by end of the fiscal year 2013-2014.
Finance Minister Hani Qadry has revealed plan to reduce these rates by 85 percent during the coming three years.
Experts stressed necessity to control the public debt, saying that the domestic debt has reached its highest level, exceeding LE1.7 trillion, while the foreign debt has reached around US$46 billion. Interests of the debts within the state budget have reached around LE250 billion until end of the past fiscal year.
Abdel Rasoul Abdel Hady, Tanta University professor of accounting and taxes, said the government must ration public spending. Though a plan was declared by Finance Ministry two years ago, he said, nothing has been done to reign in on lavish government spending. For example the inauguration ceremony of President Abdel Fattah al-Sisi racked up around LE92 million.
Abdel Hady added that reducing spending on processions of ministers and officials and applying the maximum wage would reduce burdens on the budget and the public debt. He added that controlling the public debt also means reduced borrowing.
Hassan Ouda, professor of accounting at German University in Cairo, said controlling the public debt should start with controlling the budget deficit, given that the debt results mainly from the increase of the annual deficit.
Fakhry al-Feqqy, economy professor and former deputy executive director at the International Monetary Fund, said increasing public debt means growing interests and hence increasing budget deficit. He urged reform measures be taken starting with the new budget that will be enforced next month.
Reda al-Adl, Ain Shams University economy professor, said the public debt, despite being high, should not raise concerns unless it reaches 120 percent of the gross domestic product.
Edited translation from Al-Masry Al-Youm
