Sunday May 19th, 2024
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Ministry of Finance to Impose Strict Limit on Public Sector Investment

The EGP 1 trillion limit aims to push investment towards private sector opportunities.

Cairo Scene

Ministry of Finance to Impose Strict Limit on Public Sector Investment

The Ministry of Finance is set to impose a strict limit on public sector investment for the 2024/2025 financial year, setting a stringent ceiling of EGP 1 trillion, as well as capping public debt.

The limit is intended to push investment towards private sector opportunities, which are seen as the key to medium and long-term sustainable economic growth. All investment projects undertaken by state-owned entities will also be subject to the limit.

The limit on public debt is also a significant step, with a three year goal of reducing the debt-to-GDP ratio to less than 80%, particularly avoiding external debt. These new measures are expected to come hand-in-hand with a package of more efficient economic policies in time for the next budget beginning in July, restoring economic stability following a period of high inflation and currency devaluation. Only recently, the Ministry of Finance announced the EGP 596 billion allocation for subsidies for the coming fiscal year.

Furthermore, recent financial agreements with international financial institutions, including the USD 6 billion agreement with the World Bank, has bolstered the economic situation of the country dramatically, with international ratings agency Moody’s upgrading Egypt’s credit outlook to ‘positive’.

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