President Abdel Fattah Al-Sisi made several economic promises to Egyptians prior to his election. Daily News Egypt reviews the goals set and analyses how far along they are from realisation.
Prior to election, then-political candidate Al-Sisi cited “national security” concerns for not sharing his detailed vision. Al-Sisi stated that only the broad lines of his five-year plan will be mentioned without details to avoid “schemers” being attracted to his plan. The delay in releasing the platform raised several questions, and resulted in condemnation from the Association for Freedom of Thought and Expression (AFTE).
The economic platform was released on 20 May, but the plan was removed from the official website, then republished soon after. As he previously announced, Al-Sisi’s economic plans did not specify how many projects would be included, with the majority of the goals set for the fiscal year (FY) 2017/2018.
Economic growth, budget deficit and debt
Al-Sisi targeted a 7% gross domestic product (GDP) by FY 2017/2018. He clarified in his platform that he sought to decrease the budget deficit to 8.5% by FY 2017/2018, while reducing the domestic public debt from 90% of GDP to 74.5% of GDP.
During FY 2013/2014, the overall budget deficit declined to 12.8% of GDP to record EGP 255.4bn, compared to a 13.4% deficit during FY 2012/2013.
The domestic debt amounted to EGP 1.8tn by the end of June 2014, compared to EGP 1.538tn by the end of June 2013. Of that figure, the government debt represented 84.7%, while the remaining was debt of the public economic authorities and National Investment Bank (NIB).
At the end of June 2014, the external debt totalled $46.1bn, a 6.6% increase compared to the same period the previous year. The ratio of the external debt to the GDP decreased to 16.4%, however. The ratio of the external debt to GDP by the end of FY 2013/2014 was 17.3%.
Investment Minister Ashraf Salman changed some of the targets previously announced in Al-Sisi’s platform. He stated that the target for GDP is 6% while the target budget deficit is to be lower than 10% of GDP.
Salman set a new target, however, stating that Egypt is targeting $15bn in foreign direct investment (FDI) during FY 2017/2018.
Overall growth rate rose during the first quarter (Q1) of FY 2014/2015 by 6.8%, registering 1.1% GDP growth, according to Minister of Planning Ashraf El-Araby. The minister stated that the targeted growth rate of the current fiscal year, which is 3.5%, might be surpassed to reach 3.8%.
The International Monetary Fund predicts that the growth for FY 2014/2015 will be 3.8%. For the budget deficit, the IMF estimates that it will reach 11% of GDP.
Unemployment
Discussing unemployment, Al-Sisi stated that he aims to decrease unemployment to 8% by FY 2017/2018. Slow progress has been witnessed in this area, however.
In October, a study released by the World Bank suggested that, in Egypt, the employment growth drops by 1.4% annually when connected firms enter new, previously competitive sectors
The latest unemployment report issued by the Central Agency for Public Mobilization and Statistics (CAPMAS) said that unemployment rates registered 13.3% during Q2 of 2014. In Q1 of 2014, unemployment recorded 13.4%.
The CAPMAS report stated that a minimal increase of 0.01% in the work force was witnessed in Q2, where the work force totalled 27.6 million.
The Ministry of Manpower and Immigration announced in December that approximately 592,000 workers signed contracts to work abroad between January and November 2014, with over 400,000 of those signed between March and November.
Tourism
In the tourism sector, Al-Sisi’s platform promised unprecedented development, setting a target of 30 million tourists annually.
According to CAPMAS, the number of tourists who visited Egypt in June 2014 was slightly over 785,000. This number increased to over 885,000 in July. In August, visiting tourists numbered 997,000 compared to the 564,500 that visited during the same period last year, marking a 76.7% increase year-on-year.
In September, tourists numbered some 883,000, while in October that figure increased to over one million tourists.
Foreign reserves
When Al-Sisi first took office, Egypt’s reserves of foreign currency stood at some $17.28bn by the end of May. By the end of June the reserves dropped to $16.678bn. A month later, the reserves registered $16.73bn, and by the end of August the reserves reached $16.83bn.
A minimal improvement was noticed by the end of September when the reserves registered a $36m increase compared to the previous month, amounting to $16.872bn.
By the end of November, the international reserves plummeted to $15.8bn, which was a $1.1bn decrease from the $16.9bn registered at the end of October.
