World Bulletin / News Desk
Egypt's new prime minister said on Sunday he was finalising an economic reform plan that would rein in hefty subsidies and said the economy is expected to grow in the current financial year by 3 to 4 percent or more if investment goals are achieved.
Hisham Kandil told Reuters in a rare interview that the government aims to cut the budget deficit, now running at about 8 percent of gross domestic product, by 1 percentage point in two years although he said that target was "dynamic".
Egypt has been on the ropes since foreign investors and tourists, two vital cash streams, fled after the uprising that toppled Hosni Mubarak last year. The revolt gave Egypt its first freely elected president, Mohamed Mursi, who appointed Kandil in July.
Once a darling of frontier market investors with growth of about 7 percent a year, the economy has sputtered along, growing just 2 percent in the financial year that ended in June.
Determined to draw in investors who want to see hefty cuts in fuel subsidies and other reforms, Kandil's cabinet also has to sell economic restructuring to Egypt's 83 million people, many in dire poverty and desperate to see the benefits of the revolt.
"For this year, we hope that we will get around 3 to 4 percent (growth) and after that we will jump to 4, and then 4-5, and hopefully in a few years we will come to 7 percent," the 49-year-old said, adding Egypt could hit 7 percent in four years.
Kandil said his government was finalising its economic reform programme and the draft would be reviewed next week with President Mursi.
Kandil said the government wants to make fuel and other subsidies more targeted and a coupon or smart card system to ensure the poor, rather than everyone, received subsidised butane cooking gas was expected to start in October.
There will also be cuts to gasoline subsidies in the coming months, he said, adding that these measures were part of efforts to reduce the budget deficit by 1 percentage point in the next two years, although he said targets would depend on what the population could tolerate.
"Those targets are dynamic. We have to look at what kind of support we will get and how the people will react to these measures," he said. "I am sure many of them will react positively, but of course we might have some difficulty so it will be a flexible thing too."
He said that after the president had reviewed the reform plans, there would be a public consultation about the programme. "Hopefully by the beginning of October we will open this for discussion. That also stands true for the IMF programme," he said.
He was referring to a request for a $4.8 billion loan from the International Monetary Fund, part of a bid by the government to shore up its finances after foreign reserves plunged to about $15 billion, about half their level before the revolt.
Responding to investor concerns that the Egyptian pound could be devalued, Kandil said the central bank was managing the currency in a flexible way but said investors should not delay.
"So investors should not wait for the pound to devalue. This is not going to happen soon. So now is the right time to get into the market," Kandil said, echoing comments made by the president to Reuters last month.
Meanwhile Kandil said the government needed to boost revenues as well as cut spending through more targeted subsidies, by casting the tax net wider.
"We need to look at our taxation system so it covers more people, not necessarily that we tax more. But it would be better to tax more people," he said. "We'll try to get them into the formal economy, and we will do that very soon."
Turkish Treasury says dollar-denominated bond sale was more than three times oversubscribed
"The bank is weighing transferring up to 1,000 employees to Frankfurt, including traders as well as top bankers," the paper reported, citing financial industry sources.
Frankfurt's DAX 30 index won 0.2 percent compared with the close on Wednesday to 11,624.11 points and the Paris CAC 40 rose 0.1 percent to 4,859.76 .
A weaker yen helped Japanese stocks lead a broad advance across Asian markets as optimism was buoyed by Yellen's remarks on the economy but traders moved cautiously ahead of Donald Trump's inauguration on Friday.
Central Bank skips repo auction for fifth trading day to stem sharp decline in lira value against other currencies
Number of tourists across the world rose to all time high of 1.235 billion last year, World Tourism Organization said on Tuesday.
Turkish central bank has announced to open foreign exchange depot market to enhance flexibility and instrument diversity
While PM promises 'greatest possible' access to EU market, opposition hits out at 'clear break' from Conservative policy
Prime Minister Theresa May is expected to deliver Brexit speech on Tuesday
"Net easing of banks' overall terms and conditions on new loans continued across all loan categories," as in previous quarters, the central bank said in a statement.
On a state trip to Hanoi, Japanese PM Shinzo Abe promises to help bolster Vietnam's naval capabilities
The US growth estimate was raised a tenth of a point this year to 2.3 percent, and for next year by four-tenths to 2.5 percent.
Flynas chairman Ayed al-Jeaid said at the signing ceremony in Riyadh that the deal includes an option for 40 more of the short to medium-haul planes in what airline executives said is a growing domestic market.
Central Bank skips repo auctions for third trading day to stem sharp decline in lira value against other currencies
Oxfam pointed to a link between the vast gap between rich and poor and growing discontent with mainstream politics around the world.