Egypt Can Control Budget Deficit, Increase Growth Rates

Addressing the opening session of the Euromoney conference on 9/10/2012, Prime Minister Hisham Qandil said Egypt can overcome its budget deficit estimated at LE 170 billion in the 2011-2012 budget. Egypt is also capable of upping economic growth rates to 7 per cent in five years, he said. The present growth rate is currently estimated at 2.2 per cent, he said. The Egyptian government further seeks to raise direct foreign investment to LE 170 billion, or an equivalent $28 billion, and to up the economic growth rate by the end of the 2012-2013 fiscal year to 3.4 per cent, he said. This will generate 700,000 new jobs, he added. Qandil opened the first post-Revolution Euromoney Conference held under the theme "Restarting Investment, Sharing the Benefits of Growth."

Representatives of the private sector, funding institutions, investors, politicians and academics will also be part of the conference to offer their views on the present situation and future of Egypt. The conference's first session will take up Egypt’s true economic situation and its needs in the short and medium terms regarding currency, subsidies and taxes in addition to how foreign investors are convinced to come back. Qandil said small and medium industries had risen in fact this year to 30 per cent, while the unemployment rate had reached 30 per cent. The government has been working hard to reduce unemployment by pumping more direct foreign investments, he said. He said he was looking forward to a new Egypt that would return to the Arab, regional and international folds.

Egypt has made a strong comeback to Africa under President Mohamed Morsi, he said. The launching of the Cairo-Khartoum land route will revive commercial activity, he said, adding that he would visit South Sudan later this month. Qandil said the government is focusing on infrastructure, road, utilities and the treatment of solid waste. In spite of the difficulties facing the Egyptian economy, the industrial exports increased by 5.8% and the tourism rates augmented to 10 million tourists so far this year, Prime Minister Qandil said. Egypt aims at increasing the number of tourists to 15 million in 2012-2015, he added. These positive indicators show that the Egyptian economy started to recover, he said.

Qandil said that, during September, he received 350 delegations of investors and businessmen, adding that Egypt prioritizes encouraging and developing local, Arab and foreign investment. The government wants the investors to achieve suitable profits in Egypt, Qandil said. The government is paying much attention to two important projects of developing east Port Said harbor and build Safaga-Qena road, said Investment Minister Osama Saleh to the Euromoney conference.

The current stage is witnessing a lot of challenges topped by attracting more local and foreign investments to Egypt during the coming period to support the national economy, Saleh said. The government can restore the economic balance via partnership with the private sector, said Saleh, adding that an integral plan has been set to support, encourage and attract foreign and Arab investments especially after political stability started to return. The Egyptian government is committed to all the inked contracts with the foreign investors, Saleh added. On the other hand, Finance Minister Momtaz el-Saeed said that the ministry will announce a host of projects in January where there is a partnership with the private sector. The government should organize these projects and leave the management for the investors, Saeed said.

The general budget of the state in 2012-2013 reached LE 533 billion, he said, adding that the state resources only provide LE60 billion. We should resort to investments to bridge the financing gap, Saeed said. The volume of investment in the budget this year is LE 276 billion including LE 56 billion governmental investments and 60 billion pounds public sector investments, he said. The expenses should be rationalized in order not to cause a societal imbalance, he said, adding that the government is willing to deepen the health and social insurance systems via establishing a comprehensive health insurance system.