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Egypt’s deficit relative to GDP seen broadly flat: IMF

Egypt’s deficit relative to GDP seen broadly flat: IMF

ArabFinance: Egypt’s deficit relative to gross domestic product (GDP) is expected to remain broadly flat, according to the IMF’s October 2020 Fiscal Monitor Report.

The country’s deficit has faced annual gross financing requirements surpassing 35% of GDP, which has likely constrained its fiscal response to the COVID-19 crisis, the report added.

The IMF noted that the impact of the pandemic on the Egyptian government’s finances is likely to be less drastic as previously feared.

In emerging market and middle-income economies, the overall fiscal deficit would increase by nearly 6% of GDP in 2020, compared to the prior year.

On average, the budget balance for oil non–oil exporters is forecast to weaken by about 6% of GDP.

“Average revenues relative to GDP are projected to increase 0.7% of GDP in 2021, though they will remain below pre-pandemic levels,” according to the statement.

The IMF confirmed that “Among non–oil exporters, there is heterogeneity in the expected fiscal developments.”

Egypt’s Minister of Finance Mohamed Maait said earlier this year that the budget deficit would rise to 7.8% of GDP during fiscal year 2020/2021.

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