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Government unveils new stimulus plan - Daily News Egypt

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Government unveils new stimulus plan

The interim government adopts an economic reform plan to achieve 3% growth, and reduce the budget deficit to 9%

A handout picture released by the Egyptian Presidency shows Egypt's interim president Adly Mansour (C) heading a meeting with Egypt's newly sworn in interim cabinet on July 16, 2013 in Cairo.  (AFP PHOTO/HO/EGYPTIAN PRESIDENCY)
A handout picture released by the Egyptian Presidency shows Egypt’s interim president Adly Mansour (C) heading a meeting with Egypt’s newly sworn in interim cabinet on July 16, 2013 in Cairo.

By Doaa Farid

The interim cabinet adopted an economic stimulus plan, which will aim to create a 3% growth rate over the current fiscal year, “maintain social justice and create new job opportunities,” said Ashraf El-Araby, the Minister of Planning in a press conference on Thursday.

The plan, which will span between six to nine months, involves additional investment projects worth EGP22.3bn. “The interim government’s priority is to end the current projects before starting new ones” said El-Araby, stressing that the government will depend on investment projects in the coming period to achieve the desired growth rate.

The growth rate of 2012/2013 fiscal year was 2% while the budget deficit is 14%; the government aims to reduce it to 9%.

Interim prime minister Hazem El-Beblawi tasked the country’s economic ministers with preparing the economic roadmap earlier in August.

“The current instability in the streets affects the economy, but the government insists on implementing its plan,” the minister said.

He said that projects included in the plan involve strengthening electricity grids, the completion of 17 road projects to link all the governorates, finishing the construction of 50,000 residential units, reclaiming 32,600 agriculture acres in addition to buying 600 buses for public transportation to work with natural gas which will decrease the energy subsidies granted by the government, along with other projects.

El-Araby said the public transportation project would be funded by investors from Turkey, adding that “we’ve not been informed of any suspensions.”

Last Wednesday The Federation of Egyptian Chambers of Commerce announced its intention to suspend trade with Turkey, in the wake of remarks made by Turkey’s Prime Minister Tayyip Erdogan criticising the Grand Imam of Al-Azhar Ahmed Al-Tayeb for “favouring the leaders of the coup.” Implementation of a stock market connectivity project between Egypt and Turkey was also stalled earlier last week.

El-Araby said the government is studying a new legislative amendment for the National Council of Wages, adding that the council will be reformed in two weeks. He said that the average income in the public sector is more than the private sector, despite many more working in the latter, adding that his administration “seeks more social insurance to private sector employees” he said.

“Egypt’s relation with the International Monetary Fund (IMF) is strong but the current conditions after 30 June do not allow resuming the negotiations” El-Araby said, adding that the influx of gulf aids will not compensate the IMF which aims to raise Egypt’s credit rating which has been downgraded eight times in two years.

Following the ouster of President Mohamed Morsi, many Gulf countries pledged a total of $12bn to bolter Egypt’s foreign currency reserves. In response to fears that the US would withdraw its military aid, Egyptians created a bank account with the number 306306, in reference to the 30 June protests, with the hopes that the donations would be able to compensate for the lack of funds.

El-Araby said: “the amount of donations [to the 306306 bank account] exceeded EGP 700m, and a non-governmental board of trustees will be formed from the civil society and the donors, to be in charge of it to guarantee transparency.”

Topics: Daily DNE Egypt News

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