Economist Mohamed El-Erian lauds CBE initiatives to contain COVID-19 economic fallout

As the coronavirus pandemic takes hold, this is not the time to give too much focus on budget deficits and government debt, notable economist Mohamed El-Erian said on Monday.

In press statements, the veteran economist noted that priority should now be given to preventing the short-term difficulties triggered by the coronavirus outbreak from becoming chronic problems that are difficult to resolve in the future.

“For the time being, there is no need to worry about increasing deficits and government debts, given the current circumstances caused by the pandemic’s economic fallout,” Erian said, asserting the need to utilise loan funds to boost economic growth.

The well-versed economist had earlier commended the bold measures the Central Bank of Egypt (CBE) has embarked on since mid-March to mitigate the coronavirus impact on the Egyptian economy.

Earlier in May, the CBE announced that it had taken over 15 measures to mitigate the coronavirus’ economic fallout, including cutting interest rates by 300 basis points (3 percent), in a bold move to stimulate economic growth in various sectors.

The bank’s measures also included reducing interest rates applied on some economic initiatives to support factories, middle-income home buyers as well as the tourism and agricultural sectors.