Budget deficit could reach alarming levels if urgent economic reforms are not implemented, says planning minister
Ashraf El-Arabi, Egypt's minister of planning and international cooperation, warned that the budget deficit might reach almost LE200 billion by the end of the 2012/2013 fiscal year if the government does not implement long-awaited financial and fiscal reforms, state news agency MENA reported.
The government currently aims to diminish poverty levels and redirect subsidies on basic goods in order to reach those most in need and regulate public spending, said El-Arabi to a group of journalists, Monday.
El-Arabi added that a number of Arab and western countries are ready to support Egypt to overcome its economic impasse, stressing that the "upgrading" of Egypt's credit-rating is currently the government's top priority and assured that the IMF's expected stance towards Egypt will definitely restore international confidence in the Egyptian economy.
Egypt is suffering from a widening funding gap that will reach LE14.5 billion by 2013, El- Arabi stated, adding that the postponed $4.8 billion IMF loan will definitely help in bridging this gap, along with the help of other international lenders such as the African Development Bank (AFDB), the European Union (EU) and aid from the Gulf States.
"Once we receive all foreign aid packages from international donors including the IMF, Turkey and Saudi Arabia, we expect our reserve levels to shoot up from $15 billion to almost $19 billion, ending the current state of anxiousness regarding our foreign reserves," explained El-Arabi.
The minister of planning ended his statement by drawing attention to the battered tourism sector. He stated that the crucial sector is facing a dangerous downturn and announced that a conference on "tourism promotion" will be held next January in Sharm El-Sheikh
The conference will be endorsed by all Islamist forces in order to send a strong message to the world that Islamist parties support tourism.
"Religious parties headed by the Salafist Nour Party unconditionally support tourism in Egypt," El-Arabi announced.