2024-01-19 11:16:00
01:16 PM Friday, January 19, 2024
Books – Mustafa Eid:
The Ministry of Finance confirmed that the government is working to manage macroeconomic risks with flexibility to contain successive external shocks, and deals with balance and extreme caution with the negative effects resulting from geopolitical tensions affecting economic activity, and is keen to meet the basic needs of citizens and expand social protection while adhering to financial discipline in These challenges remain very complex.
The ministry explained in a statement today, Friday, that this flexible path taken by the government in dealing with successive global economic crises was reflected in a balanced performance of the state’s general budget during the first half of the current fiscal year 2023/2024 in the period from July to last December.
The statement added that an initial surplus of 150 billion pounds was recorded, compared to 25 billion pounds for the same period last fiscal year, despite providing all the needs of the budget agencies and increasing the volume of expenditures by 56% to reduce the burdens on citizens as much as possible.
The Ministry commented on Moody’s fixing Egypt’s sovereign credit rating at “Caa1” while changing the future outlook to negative. Moody’s did not take into account the government’s current efforts when changing the future outlook to negative, as the “offerings” program enhances our ability to meet the needs. financing during the next two years, and will contribute to attracting more investment flows and reducing the need for external financing.
The Ministry pointed out the state’s success in exiting a number of economic activities worth $3.5 billion within the “offerings” program, which helps increase foreign exchange flows to cover the needs of the Egyptian economy.
The statement indicated the possibility of obtaining about $5 billion annually on favorable terms from multilateral development banks, which reflects the confidence of these international institutions in the economic path pursued by the Egyptian government with financial policies that are more capable of achieving financial discipline and maintaining a primary surplus recording in a sustainable manner. , along with continuing to implement structural reforms that enhance economic growth by making more room for the private sector as the engine of comprehensive development.
She explained that the government has identified sources for providing the external financing needs of the state’s general budget until the end of the current fiscal year, estimated at $4 billion, with the aim of continuing to diversify international markets, especially after we succeeded in returning again to the Japanese markets, and the second international issuance of samurai bonds was implemented with a value of 75 billion Japanese yen, equivalent to about half a billion dollars, with distinct pricing for a periodic return of 1.5% annually, with a maturity of 5 years, and the issuance of sustainable international bonds on the Chinese “Panda” financial market, which are allocated to finance projects worth about 3.5 billion Chinese yuan, equivalent to About half a billion dollars.
The statement stressed that we are working to put debt-to-GDP ratios on a downward path, which are currently affected by inflation, high interest rates, and exchange rates.
The statement indicated that the new procedures and reform measures for government debt management, which include setting a binding ceiling for annual burdens to ensure the downward path of the debt-to-GDP ratio to reach less than 85% by the end of June 2028, and extending the life of the budget agencies’ debt to reach 4 years in the medium term instead of 3 years. At this time, to reduce the need for quick financing.
The statement pointed out that there is a strategy that is subject to annual updating to reduce the ratio and service of debt to the gross domestic product, and to continue developing the government securities market to attract more investors by continuing to work to diversify sources of financing, in addition to a new path for exchanging debts for climate action, promoting environmentally friendly investments, and issuing new tools. And a variety of lower costs, such as sukuk, green bonds, and sustainable development bonds.
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