Minister of Finance Dr. Youssef Boutros Ghali has announced that the privatization revenue from the mobile license and the sale of the Bank of Alexandria will be directed towards infrastructure, social services, housing and youth training to meet with the demands of the labor market.

 Ghali affirmed that the privatization revenue has helped reduce the budget deficit from 9.3% of the GDP to 5.5% but that the budget deficit will settle around 6.7% when the flow of revenue from privatization recedes.

Ghali added that inflation is 12% due to several foreign setbacks reflected in the bird flu, the rising energy prices and  the reduced production of agricultural crops.  Ghali noted however that the inflation levels will drop by end of August.  Ghali also noted that prioritizing on needs of the state is discussed in Cabinet meetings and among the top level priority of the government is reducing the budget deficit and developing the money market.  He noted the issuance of bonds in Egyptian pounds for the first time in international markets worth five billion pounds maturing in ten years in efforts to support the Egyptian market and encourage its link to international markets thereby encouraging investments and help reduce public debt.

Ghali noted that the government is looking to strengthen the performance of its agencies that focus on the protection of the consumer such as the customs and tax departments which monitor the market using sophisticated automation.  Customs procedures are finalized in six hours in efforts by the state to streamline procedures.

Ghali noted that the Ministry of Finance has a center for high bracket taxpayers in both the tax and customs departments and which include 20% of taxpayers who finance 80% of the collection.  Ghali noted during a roundtable discussion that the next five year plan will witness a reduction in employment in view of the growing GDP due to an increasing number of industrial projects and expansions in companies in accordance with the government plan in this regard.

The Minister noted that 500 million pounds will be allocated to a program to rehabilitate and train young graduates, saying Egypt has a competitive edge and availability of highly efficient human cadres.

Ghali told reporters that bad debts are within safe limits in the wake of resolving the crisis that was linked to a number of parliamentarians’ controversial loans crisis which has erupted years ago.  Ghali expected a surge loans to 8% while the economy will require a surge of up to 10% in 2010.

(source : Ministry of Finance)