UPDATE 1-Egypt's budget deficit falls to 7.8% in FY 2019/20 – cabinet
(Adds details, background)
CAIRO, July 29 (Reuters) – Egypt’s total budget deficit fell to 7.8% of gross domestic product (GDP) in the fiscal year 2019/20, down from 8.2% in the FY 2018/19, the cabinet said in a statement on Wednesday.
The North African country had expected a deficit of 7.2% in the fiscal year to June 30, before the coronavirus pandemic hit its economy hard.
The primary surplus of 1.8% of GDP was below the 2% forecast, but the cabinet called the figure “a very good result amid the exceptional circumstances”.
Egypt is now expected to post GDP growth of 3.8% for the last fiscal year, compared with an initial projection of 6%, the cabinet statement quoted Finance minister Mohamed Maait as saying during the weekly government meeting on Wednesday.
The country’s debt ratio is expected to decline to 86.2% of GDP at the end of June from 90.4% a year earlier, Maait added.
The country’s economy was boosted in the last three years by an upswing in tourism, strong remittances from Egyptian workers abroad and recently discovered natural gas fields coming onstream.
But the pandemic has seen tourism has collapse and the price of gas plummet, while worker remittances have come under threat with the decline of oil revenues in Gulf Arab states, where many Egyptians are employed.
A Reuters poll earlier this month showed Egypt’s economic growth slowing to 3.1% in the 2020/21 fiscal year due to the pandemic, down from the 3.5% forecast in a similar poll three months ago. (Reporting by Moamen Said Ataallah; Writing by Mahmoud Mourad; Editing by Jon Boyle, Kirsten Donovan)
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