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Wednesday, 17 February 2021

Cabinet is getting its three-year priorities in order

A three-year state budget and fiscal policy priority framework will be on the House of Representatives’ agenda when cabinet submits the FY2021-2022 state budget at the end of March, Prime Minister Moustafa Madbouly said at a meeting with parliamentary committee heads yesterday, Al Mal reports. The budget framework will outline the government’s medium-term spending priorities and will be taken up as a new approach by the government and submitted alongside the standard detailed annual budget, the prime minister said.

What will the framework entail? This isn’t a return to statist five-year planning cycles, but rather a look ahead to the outlines of our post-covid economic recovery plan. In FY2019-2020, we saw an increase in spending on health, education, wages and welfare, and included fuel and electricity subsidy cuts — a trend we can expect to continue. We would also expect the framework to include the government’s plans to continue cutting back its debt bill, which has been a priority point for several years. The Finance Ministry had begun implementing a long-term debt reduction strategy back in 2019, with the aim of cutting down the debt-to-GDP ratio to 80% by 2022.

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