Decisions to rationalize public spending limit economic crisis – economists

By Dina yehia

Prime Minister Mostafa Madbouly has issued a number of decisions this week to rationalize public expenditure to combat the current economic crisis. The decisions were welcomed by economists who described the government move as a positive step.

Madbouly’s decision, which issued on Monday, includes Rationalize public expenditure in entrants at state budget, Postpone the executive position of the projects that haven’t been started yet, Rationalize all travel business unless absolutely necessary and pm’s approval, Postpone spending on unnecessary needs, Ban expenditure on scholarships, The approval of the minister of finance is necessary in case of dealing with foreign exchange .

The regulations will remain in effect until the end of the current fiscal year 2022/2023, which ends in June 30.

Professor of Economics, Helwan University El-Tuni stated in an interview with Sky News Arabia, that the decisions to rationalize public spending will support the volume of dollar cash reserves inside Egypt, and will have a significant positive impact on the internal economic crisis.

El-Tuni also explained that one of the most important decisions that will be implemented in the coming period is “not allowing any government agency or official to travel abroad or send delegations abroad, and to stop all forms of educational scholarships abroad that have a component in dollars, except after referring to the Prime Minister and obtaining his approval, which It will contribute to preserving the dollar.”

At the same time, Dr. Jihan Abdel Salam, Head of the Egypt Studies Unit and Professor of Economics at Cairo University, says that the decisions represented a strong positive step by the government to confront the economic challenges that the world and the Egyptian economy are currently witnessing, through the use of fiscal policy mechanisms, the most important of which is the rationalization of public expenditures.

Abdel Salam added, in her interview with Sky News Arabia, that: “The decisions are a strong challenge that requires several controls to ensure its success, the most important of which is the activation of control systems and tools on a permanent and continuous basis, and perhaps this is what the government will do represented by the Ministry of Finance to ensure implementation These decisions and follow-up results.

On the other hand, the economics professor at Cairo University pointed out that those decisions made it clear strongly that the Egyptian state, in its exerted efforts towards reform and development, does not only achieve this through new economic projects, but that reforming financial and monetary policies is also a supportive step to complete economic successes.

She continued: “Rationalizing expenditures and directing funds in the most necessary spending frameworks is undoubtedly a serious step towards strengthening the governance of the work of ministries and government institutions in Egypt. “