The International Monetary Fund exposed the economic deficit in the coup government, and the coup government admitted that it borrowed 10 billion dollars for national projects in 2020. The International Monetary Fund said that Egypt suffers from a large deficit and needs external financing estimated at about 30 billion dollars during the current fiscal year that ends on 30 June 2021.
The fund added that after reviewing the economic situation in Egypt, it became clear that the size of the total needs includes the current account deficit, which will be recorded at the end of the current fiscal year about $ 16.5 billion, compared to $ 11.2 billion last year.
The fund explained that the finances that the coup government will receive are divided between foreign direct investments and foreign commercial loans assumed under the fund’s program, net investment of another portfolio, external financing for the program, and net capital flows.
Expenses are more than revenues
It is expected that the net foreign direct investment in the current fiscal year will be in the range of $ 5.5 billion, and the volume of foreign loans assumed under the SBA program will be $ 6.5 billion, and the Executive Board of the International Monetary Fund approved on June 26 the credit readiness agreement for a period of 12 months worth 5 One billion and 200 million dollars.
The vast majority of the borrowed sums were allocated to the public sector at a value of 6 billion and 700 million dollars, while 3 billion and 200 million dollars went to the benefit of the private sector.
The new administrative capital acquired the lion’s share of loans and grants, which amounted to about one billion and 500 million dollars, while 477 million dollars were provided to the health sector in Egypt, and the coup government allocated 555 billion pounds in its financial budget for the new year to repay the loans, and the amount allocated for the repayment of loans and their interest increases. 180 billion pounds from last year’s budget.
Dr. Mustafa Shaheen, a professor of economics at the University of Auckland, said that the state’s revenues in Egypt are much less than its expenditures, which forces the coup government to borrow from abroad or from within, adding that the Egyptian budget deficit is chronic and it is not expected to address it in the coming years.
Shaheen added, in a phone call to the “Downtown” program on the “Watan” channel, that the debt interest in Egypt only amounted to 555 billion pounds, and the coup government pays debt installments close to this amount, so that the interest and installments of loans exceed one trillion pounds, in addition to the original debt value. The internal debt amounted to 4 trillion pounds.
He stressed that the coup government will remain indebted for a long time in the future and will not be able to provide public services to its citizens, which prompted the Sisi government to raise services prices, lift subsidies on fuel, electricity and water, and raise metro ticket prices.
He pointed out that America is a debtor country but not affected because it is a large country with a strong economy, adding that in the Corona crisis, the government disbursed subsidies to low-income citizens and also provided a weekly salary to the unemployed during this period from March to last July.
He pointed out that the Corona crisis was strongly reflected on the economy, and a large number of sectors were depressed, expecting the state to fail to face any crisis during the coming period, which was evident during the current health crisis, when the state failed to solve the oxygen crisis and provide medical supplies and preventive tools.
Shaheen denounced Sisi’s statements during which he claimed to provide 100 billion pounds to counter the repercussions of Corona, at a time when the medical sector is collapsing due to the strikes of the epidemic, and the people were forced to collect donations to buy oxygen cylinders and present them to hospitals after the lack of oxygen in more than one hospital and causing mass deaths .
Shaheen pointed out that all countries have debts, but they have imports to cover the repayment of these debts, explaining that Turkey, for example, exports during the year at a value of 180 billion dollars, while its trade deficit reaches 25 billion dollars, in contrast, Egypt’s exports do not exceed 25 billion dollars.
He noted that the Egyptian economy must search for sources of financing away from rentier sources such as the Suez Canal, petroleum, tourism, and the returns of Egyptians abroad, and go to sources that generate income and production, denouncing the coup government’s closure of a number of productive factories such as the Talkha fertilizer factory and iron and steel, describing what the government is doing Al-Sisi is demented and stupid and is destroying all the capabilities of the economy.
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