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· A study by the Egyptian Center for Strategic Studies revealed that the Egyptian economy has overcome the crisis of Covid-19
· The budget of 2020-21 is the largest in Egypt’s history at L.E. 2.2 trillion. The budget outlay was set before the outbreak of the pandemic
· Egypt has been continuously phasing out subsidies on petroleum. L.E. 28.1 billion were dedicated towards petroleum subsidies in the budget, compared to L.E. 52.9 billion the year before
A study by the Egyptian Center for Strategic Studies revealed that the Egyptian economy has overcome the crisis of Covid-19. The budget of 2020-21 is the largest in Egypt’s history at L.E. 2.2 trillion. The budget outlay was set before the outbreak of the pandemic.
The economy grew by 3.5-4 percent this fiscal year with a primary surplus in the budget. Increased bread subsidies and the increase in government investments contributed to pushing up the budget deficit by 6.7%. Major items that pushed subsidy elements were petroleum and wheat. Public investments, which is in the nature of capital investments, also has gone up during the year.
Egypt has been continuously phasing out subsidies on petroleum. L.E. 28.1 billion were dedicated towards petroleum subsidies in the budget, compared to L.E. 52.9 billion the year before. The country is expected to achieve cost savings of US$5 billion for petroleum products.
The wheat subsides will increase to 11 percent of spending due to the increase of the price of wheat and a Russian temporary tax. Russia is one of the main exporters of wheat to Egypt. Public investments will increase by 60% in the first half of the fiscal year 2020-21 to reach 16-18 percent of the public spending. This is about L.E. 20 billion more than the plan.
Government investments have increased to 16-18 percent of public spending. That is 14 percent higher than the previous year. This has helped in alleviating unemployment to 7.2 percent in the fourth quarter of 2020. The unemployment has come down from its high in the second quarter of the same year at 9.6 percent.
