Interview: Egypt witnesses substantial progress in economic reform, says finance minister

CAIRO, Feb. 23 (Xinhua) -- Egypt has made substantial progress in its economic reform with significant achievements across various sectors, Egyptian Finance Minister Ahmed Kouchouk has said.

In a recent interview with Xinhua, Kouchouk said Egypt has made strides in areas such as coordination, a flexible exchange rate system, targeted inflation reduction, primary surpluses, sound debt management, and the establishment of a debt ceiling.

"Inflation rates are declining, and the primary surplus has reached a record high. Spending on health and education is increasing, private investment now represents 63 percent of total investment, and increases are seen in tourism revenue and remittances from Egyptian workers abroad," Kouchouk noted.

He added that for the current fiscal year, which runs from July 1st last year to June 30th this year, the economy is performing well. During the first quarter of the 2024/2025 year, the growth rate reached 3.5 percent, up from 2.7 percent in the same period last year.

"Last year, we maximized the benefits of the Ras Al-Hekma deal (with the United Arab Emirates), using proceeds from the deal to increase net reserves and improve net foreign assets. This significantly boosted investor confidence in Egypt's currency stability," he said.

Besides, Egypt has consistently paid off debts on time and reduced its debt from 96 percent to 89 percent of GDP. The country has for the first time set a ceiling for government debt this year.

The external debt is expected to be reduced "both in absolute terms and as a percentage of GDP" this year, Kouchouk said, aiming to reduce overall debt to below 80 percent in the coming years.

With the State Ownership Policy Document affirming the state investment in necessary areas, the private sector has been provided with more opportunities, Kouchouk said.

The general principle is divestment and public offerings, he said, adding that there will be four offerings available to the private sector this year, according to Egyptian Prime Minister Mostafa Madbouly.

Stressing that the private sector is a fundamental partner of the state, the minister said that maximizing asset value and returns and giving more space to the private sector through competitive projects have helped create more and better job opportunities, and boost returns for the state.

He cited the Ras Al-Hekma deal as an example of the partnership, which involves developing a high-end tourist city and transforming the North Coast into a world-class Mediterranean tourist destination.

Financing packages that Egypt seeks to obtain, whether from the EU, the IMF or the World Bank, provide access to low-cost and long-term financing, and support for targeted reforms, Kouchouk said.

These "will enhance the competitiveness of the economy and achieve greater economic stability," and contribute to favorable financing for the private sector, enabling it to compete effectively, he said.

Kouchouk added that Egypt is working to streamline bureaucratic procedures, offer tax incentives to boost investor confidence and collaborate with the Ministry of Investment and Foreign Trade to simplify procedures.

"The priority in the coming period will be structural reforms aimed at enhancing the economy's competitiveness, achieving higher growth rates, and implementing a manufacturing and export strategy by attracting and encouraging investment," Kouchouk said. ■