Egypt’s local public debt has exceeded LE689 billion for the first time in the country’s history, a report by the Ministry of Finance has revealed. Government debt represents 58.5 percent of Gross Domestic Product (GDP), compared to LE570 billion, representing 54.9 percent of GDP, in September 2008, the report added.
The total of the government’s external debts was US$30.5 billion until last June.
Tax proceeds from corporation tax decreased to LE9.7 billion, dropping by 26 percent. Proceeds from service and commodity tax stood at LE23.3billion, down by five percent. Customs tax proceeds also went down by around 22.8 percent, totaling LE4.7 billion. Meanwhile, property tax increased fourfold compared to the same period of last year, totaling LE3.6 billion.
Aliaa el-Mahdi, dean of the Faculty of Economics and Political Science at Cairo University, downplayed the significance of the increase in local debt, saying it was still within the safe limits so long as it didn’t exceed 50 percent of GDP. “The number is alarming, though not terrifying”, she said wondering how GDP was on the rise while government revenues were on a down slide.
On the other hand, Ahmed Nour, former dean of the Alexandria University’s Faculty of Commerce, said the local debt was alarming because it meant that the individual’s share of debt exceeds LE9000.
Translated from the Arabic Edition.