Egypt’s finance minister refused to rule out requesting further international aid, admitting the country was unable to be “totally self-sufficient.”
His comments come as Egyptians vote on a new constitution that will set the stage for parliamentary and presidential elections later this year.
“The Egyptian economy can benefit from the all the stimulus it can get,” Ahmed Galal, who was appointed minister of finance in July 2013, told CNBC.
Egypt has been promised billions of dollars of aid from both the International Monetary Fund (IMF) and its wealthy Gulf neighbors Saudi Arabia, United Arab Emirates (UAE) and Kuwait.
However, negotiations with the IMF about a $4.8 billion loan are ongoing, having come to a hiatus when President Mohamed Morsi was ousted in July 2013.
“We are making some reforms. We are trying to get the economy to be self-sustained. But in all cases, I need to make the point that Egypt is not going to be totally self-sufficient,” Galal said.
He highlighted that Egypt’s saving rate in relation to GDP (gross domestic product) was about 15 percent, rather than the 25 percent it was aiming for.
“That is a saving-investment gap of about 10 percent — that’s over $20 billion,” he added.
Galal’s comments come amid ongoing political uncertainty in Egypt, which began during the revolution of 2011 and has caused its once-vibrant economy to struggle. Economic growth has slid over the last three years, with officials recording an annual rise of 1.5 percent last quarter — far off the seven-plus percent achieved before the uprising.
Nonetheless, Galal remained positive that the country could post at least 3 percent annualized growth by this year’s national elections in the spring.
“I’m still sticking to 3-3.5 percent growth at the end of the period,” he said.
“The reason why things did not pick up right away was because it does take a little time… Stimulus packages will take their time to find their way through the system, to boost economic demand and to give factories and the supply-side time to respond, and that is taking place.”
Prior to his appointment as minister of finance, Galal worked at the Economic Research Forum, a research institution focused on the Middle East, and served at the World Bank for 18 years.