Egypt spends LE 40B of LE100B package allocated to confront COVID-19

CAIRO – 7 May 2020: Egypt spent LE 40 billion out of LE 100 billion allocated to counter the negative repercussions of coronavirus pandemic, according to Minister of Finance Mohamed Ma’it.

Ma’it clarified during a cabinet meeting, Thursday, that it included the provision of about LE 5.1 billion in additional allocations for the Ministry of Health, and LE 5 billion for the Ministry of Supply to provide additional needs of food supplies and wheat.

He added that it also included allocating LE 10 billion to pay the dues of contractors and suppliers to help them pay their obligations and workers ’salaries.

Finance Minister also referred to the allocation of about LE 10 billion to sectors affected by the coronavirus, most notably tourism and aviation.

He pointed out that the coronavirus crisis is severe for the whole world, and speeding up dealing with the crisis will benefit the Egyptian economy.

The Finance Minister said that the corona virus crisis affected the Egyptian economic situation during the past two and a half months.

“The government was targeting an economic growth rate close to 6 percent, and we now estimate it by 4.2 percent, with a decrease of 1.8 percent or LE 175 billion,” he stated.

Meanwhile, Ma’it expected that the volume of Egypt’s public debt will increase by the end of the current fiscal year, due to the increase in the volume of spending in exchange for declining revenues, as a result of the negative repercussions of coronavirus's results.

According to Ma’it, the volume of the public debt of the state was expected to hit about LE 5.72 trillion, but that it would increase by about LE 44 billion, equivalent to 3 percent of the gross domestic product (GDP).

He added that Egypt's revenues were affected during the current period due to the repercussions of the Corona virus, as there was a decrease in budget revenues by about LE 75 billion, including LE 65 billion lost in the tax proceeds.

Ma’it pointed out that the government raised the target deficit rate for the current fiscal year from 7.2 percent to 7.9 percent.

During the press conference, Egypt’s Prime Minister Mustafa Madbouli on Thursday said the preventive measures taken to face the coronavirus crisis during the first half of the Islamic holy month of Ramadan will continue for the rest of the month.

Among these measures is a night curfew from 9:00 pm to 6:00 am, and opening commercial centers over the whole week until 5:00 pm.

Madbouli said the budget for the new fiscal year will include an article allocating LE 100 billion ($6.35 billion) to raise wages and pensions, affirming that the state has been keen to not place extra burden on citizens during the coronavirus crisis.