By Ahmed Farhat
Egypt’s budget deficit is expected to drop to 10% during the current fiscal year, according to Finance Minister Ahmed Galal. This is opposed to 9.1%, which the government had hoped for prior to the passing of Egypt’s minimum income law. The new law sets monthly minimum income rates at EGP 1,200.
He added that Egypt’s new value added tax law is also soon be released, and that the ministry is currently working on a draft law to present before the country’s private sector business community. He hoped that such a law would be completed during Egypt’s transitional stage.
In a press statement made during a meeting held with the American Chamber of Commerce on Sunday, Galal stated that the Ministry was working to put the finishing touches on the country’s new minimum income law, which would take into account the career progression of state employees. The new law will cost the Treasury upwards of EGP20bn.
He stated that the recent revocation of a $2bn Qatari deposit was not cause for concern, as the country’s foreign currency reserves had stabilised between $17bn and $18bn, enough to cover Egypt’s exports for a period of up to 3 months.
Galal added that he had not recently met with delegates from the IMF, as the country’s economic situation was stable and did not require that a loan be taken out. The value of an IMF loan was in its ability to provide Egypt with additional funds in addition to helping to achieve credibility in the eyes of the international community. He stated that Egypt was not currently in need of either, and that the current government was hoping to achieve growth of 3.5% this fiscal year.
He concluded saying that the government’s current policy would be to expand the economy, adding that imposing new taxes currently would not be appropriate.
Translated from Al Borsa newspaper