Egypt pledge on Sunday to restore growth with a corresponding solid action, along with a government program that wished to lower the budget deficit at the same time lending a hand to the poor as public anger rises over a weakening economy.
Sherif Ismail, a Prime Minister said that the government anticipates a target in economic growth by about five to six percent and pursue the budget deficit lesser than 10 percent by the end of fiscal year 2017-18.
He said, the economy of Egypt recently grew by 4.2 percent, along with an 11.5 percent budget deficit.
"It is up to us to take several hard decisions that have long been delayed, (but) any economic steps will be accompanied by the requisite social protections," he added.
The growing population had overwrought public services, while the political instability was directed to a growth, including foreign investment since 2011, according to Ismail.
Subsequently, the program aims to introduce a long-delayed Value Added Tax and reforms to the costly subsidy program will be encouraged. However, the said changes were not supported by any specifications on how it would work.
The government program was protested by tons of unemployed graduate students outside the parliament, violating a strict protest law that has sent high-profile activists to jail and were penalized of up to seven years behind bars.
Meanwhile, President Abdel Fattah al-Sisi promised to lower the jobless rate by about 10 percent in the next five years. In December, the unemployment rate records 12.8 percent, the government said. Analysts are expecting it might post higher.
Ahead of the alarming protest, the students were shouting "Sisi, the youth are eating dirt ... Sherif, what has your government done?", while loaves of subsidized bread were spread on the ground over their masters and doctoral certificates.
Many difficult reforms were postponed, from a VAT that would add government revenues and civil service law that would cut the public workforce of the country, to a striving plan to discourage the country off costly energy subsidies that have been reduced.
Earlier this month, the country devalued the pound by about 8.78 per dollar, previously at 7.73. Analysts stated that foreign investment would be encourage but the country would struggle over higher inflation, which posted 9.1 percent in February.
Furthermore, the parliament of Egypt will vote for approval of the policy agenda of the government. If the program was turned down by the parliament, it will be considered as a vote of no confidence against the government. Meanwhile, no date has been specified for the vote.
The first parliament of Egypt was elected in over three years in November, and was dominated by Sisi loyalists.
Egypt’s Ambitious Programme
After Prime Minister Sherif Ismail told the Egypt’s parliament to target an economic growth of five to six percent by the end of the fiscal year of 2017-18, the ambitious three-year plan was unveiled.
As the most populous Arab nation suffered in a political commotion and uncertainty, it has now in huge need of private investment, mainly foreign currency inflows, in order to stagnate the weight on a strained state budget and to direct a solid currency crunch that has brought a sluggish economic activity.
The World Bank reissued forecast for the economic growth of Egypt in January to 3.8 percent for the current fiscal year, previously from 4.5 percent anticipated in June last year, highlighting a shortage on foreign currency. However, the bank is expecting the country to pick up growth in years, led by investment.
Keep updated about the latest trend in the financial market. Follow FSM News and subscribe to our daily newsletter.