Egypt's Planning Min. explains global economic crisis during Egypt's Economic Conference

CAIRO - 24 October 2022: Egypt continued the economic reform despite the repercussions of the Covid 19 crisis and the consequent pressure on financial policies, according to the Minister of Planning, Hala El-Said.

 

El-Said stressed that the crisis affected the financial situation of the countries,and it was  followed by the geopolitical crisis and its continuous repercussions, which led to a severe shortage in the supply of goods and thus severe disruption in supply chains, and the energy crisis in Europe, all of which raised prices significantly. 

 

This came during El-Said’s participation in Egypt’s Economic Conference which is currently being held for three days in the Administrative Capital in Egypt.

 

“After that we entered an inflationary wave and the central banks started to raise interest rates to reduce the pressure of this inflation on citizens, and as a result the emerging economies are suffering from a severe rise in interest rates and capital outflows, in addition to the real estate crisis in China,” she stated.

 

She pointed out that there are 3 main countries that strongly affect growth rates and severe pressure on reducing growth rates in the global economy, namely America, China and Japan.

 

The Minister of Planning pointed out that the situation in the world is witnessing the dangers of stagflation, as there are rising inflation rates and declining growth rates, and with the increase in uncertainty, this wave will continue for an extended period.

 

On an international level, the increase in unemployment was estimated by 228 million citizens by the end of this year, and the United Nations Development Program "UNDP" estimated an increase of 75 million people who will enter the poverty level by the end of this year, in addition to a sharp increase in the global debt-to-GDP ratio to around 350 percent, according to El-Said.

 

At the local level, growth rates in Egypt have reached high rates at times, but they are always “unsustainable”, she said, noting that Egypt has achieved unprecedented growth rates in the past few years, reaching an average growth rate of 9 percent in the first quarter of this year 2022.

 

“We suffer from a large gap between exports and imports during the past 20 years, due to the low contribution of productive sectors such as industry and trade to growth, which leads to the unsustainability of the growth achieved by the state,” she added.

 

According to the planning minister, the unemployment rate for those with higher qualifications in Egypt has reached 15 percent, while the unemployment rate for females is 3 times that of young people.

 

Although the unemployment rate reached 7.2 percent, the lowest level in the last 20 years, there are challenges facing us to reduce unemployment rates, she pointed out.

Furthermore, the minister stated that the contribution of the basic productive sectors in growth reached 26 percent during 2019/2020, and the growth rate is targeted to reach 30 percent in 2025, adding that the contribution of the green public investments in the state plan from 15 percent in 2020/2021 to 30 percent last year and 40 percent this year. “It aims to reach 50 percent in 2024/2025.”

 

El-Said said that the 2016 economic reform program included social protection and rationalization of the energy sector, revealing that previously, 70 percent of the energy sector subsidies went to the 30 percent of the wealthiest groups.

 

“The Egyptian state is completing a comprehensive structural reform program that will affect the productive sector, which will lead to strengthening the Egyptian economy and making it more flexible and able to absorb shocks,” she said.

 

Moreover, the government seeks to increase the per capita share of industrial exports and improve the per capita food security index, according to the minister.

 

El-Said said that the population increase in Egypt annually reaches 2.5 percent, with a net annual rate of 2 percent.

 

She also said that the percentage of young people from the total population reaches 60 percent.

 

She concluded her statement by saying that 10 international educational schools were accredited this year, and the first professional sectors platform was launched.