Prime Minister Atef Ebeid has stressed that these debts are covered by capital assets. Besides, most of these debts are owed to the National Investment Bank. This is a state-owned bank and its main function is to fund state development plans. Despite the above, Minister of Finance Medhat Hassanein has vowed that the government will make every effort to reduce the public debt ceiling. This will entail the collection of an estimated LE17.6 billion in tax arrears, and the financial reform of the state authorities.
Most economists now agree the market is in the throes of a recession and liquidity squeeze.
There is general agreement that the market is now gripped by a recession, some of the blame for which must be placed on the former government. We urged the current government to inject the market with sufficient cash and the prime minister has promised that LE24 billion will be injected into the market at a rate of about LE2 billion per month. This will include repaying some of the estimated LE22 billion of government debt owed to contracting, electricity and cotton companies.