Egypt's cabinet approves draft law of 2020-21 FY with expected 6.3 pct deficit

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CAIRO, March 26 (Xinhua) -- Egypt's cabinet has approved on Thursday the draft law of the fiscal year 2020-2021 budget with expected deficit of 6.3 percent, according to statement published on the cabinet website.

Egypt's fiscal year starts in July.

Finance Minister Mohamed Ma'it said "the new budget aimed at maintaining highest rate of financial stability along with boosting the economic activities by achieving 6.3 percent in deficit."

He explained that the new draft law targets a 2 percent preliminary surplus that will allow the continuity of reducing the budget debit along with activating the economy.

The 2020-21 budget is expected to reduce the public debt, compared with the GDP, to reach 82.7 percent by end of June 2021, he added.

Meanwhile, Planning Minister Hala al-Saeed said Egypt reduced its GDP growth target for the current fiscal year 2019-20 to 5.1 percent from 5.6 percent.

"The North African country also is targeting growth of 4.5 percent in 2020-21 but it could dip to 3.5 percent if the coronavirus crisis lasts until mid-year," she added.

Inflation is expected to rise to 9.8 percent if the crisis continues until Dec. 2020, due to the high demand on some products like medical supplies and detergents, she added.

Egypt confirmed on Wednesday the total number of COVID-19 cases has reached 456 and 21 death.

Ahmad Ali, economic expert attributed the country's ability to handle the repercussions of the virus on the economic factors, despite halting the tourism and aviation sectors, without borrowing from abroad, to the economic reform that started in 2016.

The world oil sharp decline prices, and the interest rate reduction have saved 150 billion Egyptian pounds (9.52 billion U.S. dollars), the expert told Xinhua.

He expected Egypt with its diversified economic resources could stand longer compared to other countries in the region that depend on oil revenues or have poor economic reform plans amid the COVID-19 outbreak.

The economic expert said the government will direct more investments in the coming months to the education and health sector in addition to resuming the substructure projects. Enditem

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