By Mahmoud Salah Eddin
Cairo – Mubasher: Narrowing Egypt’s budget deficit needs ‘difficult’ decisions to be taken in the coming period, said Wael Ziada, head of research at EFG-Hermes and executive chairman of EFG Hermes Leasing.
He added that the central bank’s newly designated governor will adopt a policy of bringing out an abundance of foreign currency and strengthening demand for the local currency.
Egyptian President Abdel Fattah El-Sisi issued a presidential decree in October appointing senior banker Tarek Amer as Egypt's central bank governor. Amer replaces Hisham Ramez who submitted his resignation.
Speaking to Mubasher during an investment conference held in Cairo late last week, Ziada explained that the reasons behind the budget deficit are mainly ‘structural’ due to difficult economic conditions witnessed in the last five years.
However, the Egyptian government has taken some steps aimed to plug the deficit, including a cut in fuel subsidies as well as a halt in raises for public salaries this year, which helped recycle resources to more essential directions.
The Finance Ministry data showed earlier that budget deficit shrank to 11.5% of gross domestic product, from 12.2% in the fiscal year 2013/2014 and 13.7% in 2012/2013.
Ziada also ruled out a delay in the Egyptian government’s plan to raise $1.5 billion loans from global credit market.
Translated by Sayed Abdel Rahman
