Ministerial Meeting on Economic Situation Improvement

Prime Minister, Dr. Kamal Al-Ganzoury, held meeting on the economic situation improvement, in attendance of Ministers of Planning and International Cooperation, Supply and Internal Trade, Tourism, Communications, Industry and Foreign Trade, Petroleum and Finance, General Secretary of the Cabinet of Ministers, Head of GAFI, and commissioner of the public business companies.

The government is committed to reduce the state deficit amounting to EGP 134 billion through rationalization of the governmental expenditure, and enlargement of state resources. All procedures to be taken to reduce expenditure will not touch main services provided to people or daily requirements, or subsidy provided to limited income, along to salaries, wages, allowance, annual bonus, and pension holders.

Expenditure rationalization volume will reduce to reach EGP 20 or 23 billion through governmental purchase rationalization, and part of such rationalization will be allocated to push new governmental investments in the state investment budget and serve people including development of main services such as water and waste water in various governorates. Dr. Al-Ganzoury called all governors to carry comprehensive survey on all water and sewage projects where 80% was achieved to heads priority.

New investments push considers as a known global mechanism to activate the market especially for countries, which face financial crisis and economic recession. It was agreed on canceling subsidy provided to industrial projects of highly energy usage, because such industries achieve massive profits. The government will intensify supervision on products of these factories in order not to raise prices due to the subsidy cancellation.

The Trade and Industry Ministry will take procedures on deficit reduction and will set restrictions on importation of some complementary and entertainment goods for temporarily period, while considering the international commitments and agreements with the world trade organization and the world trade exchange until improving the trade balance.

The government is about to revive the veal project in coordination with the Finance and Agriculture Ministries to provide meat with affordable prices. The government approved to double the financial accreditation allocated to school nutrition amounting to EGP 470 million starting from the coming study year. The global studies confirmed the necessity of children nutrition to protect their health, body and mental skills. The Minister of Finance stated that procedures of budget deficit reduction includes provision of incentives for donors who did not pay taxes needed by the state until providing various discounts in accordance to the payment period and the speed time of paying late amounts.

The government starts benefiting from the unused stock in the governmental authorities and exchange requirements among the governmental authorities instead of purchasing new goods, Finance Minister said. He referred to the possibility of benefiting from reserves in the budget to pay some items in the budget deficit, confirming that the government will not subject more commitments on people.

The Finance Ministry has presented a draft law to set sticker on some products to prevent smuggling to Egyptian markets. The foreign debt volume is in safe limits, and Egypt ranked one of the fewer countries of foreign debts. The foreign debts rate amounts to 15% of GDP, and the government has strict controls to be enforced in the foreign borrowing. A project on bonds of Egyptians abroad employees is being studied to increase the interest percent, and subscription on bonds purchase will be opened over two days in the Central bank in coordination with the planning ministry.