Assessing fiscal sustainability in Egypt: a comparative study

Abstract

PurposeThis paper aims to assess the fiscal sustainability in Egypt during the period 1990–2018 using deficit accounts (DA) approach. It also tries to investigate the possibility of applying generational accounts (GA) in Egypt as a new approach to assess fiscal sustainability.Design/methodology/approachThis paper tries to assess fiscal sustainability in Egypt during 1990–2018 using DA and GA approaches. DA approach includes primary deficit indicator, tax gap indicator, augmented Dickey-Fuller stationarity test for debt/GDP ratio and Johansen co-integration test between government revenues and expenditures. However, concerning the possibility of applying GA in Egypt, field study form was designed including specific questions to academic and executive economic experts to investigate if it is possible to apply GA in Egypt.FindingsThe empirical findings of the field study indicate that Egypt witnessed fiscal sustainability during the period 1990–2018 using DA. On the other hand, there are various obstacles, including administrative, technical, legal and political obstacles which hinder Egypt from applying GA to assess fiscal sustainability.Originality/valueTo the best of the authors' knowledge, this paper assesses fiscal sustainability in Egypt using DA for a longer and updated time series within 1990–2018. In addition, it is the first paper to examine the possibility of assessing fiscal sustainability using GA approach in Egypt.

Response of Fiscal Policies to the Cyclical Fluctuation of Output and Expenditure for Sustainable Debt in Egypt: An Empirical Study

“…Results in tables (4-5), (4)(5)(6), and (4-7) confirm that there is no serial correlation in residuals, there is homoscedasticity in the two models, and the coefficients are stable over time. The results of the normality test in tables (4)(5) and (4)(5)(6) prove that residuals follow the normal distribution. While in table (4)(5)(6)(7) the results show that residuals don't follow the normal distribution.…”

“…The results of the normality test in tables (4)(5) and (4)(5)(6) prove that residuals follow the normal distribution. While in table (4)(5)(6)(7) the results show that residuals don't follow the normal distribution.…”

“…Table (4)(5)(6) show the relationship between external debt and primary budget balance. The equation is estimated in three steps to confirming the relationship between external debt and primary budget deficit.…”

“…The results in Table (4)(5)(6)(7) show the statistical correlation between domestic debt and the primary budget balance. column (1) in table (4)(5)(6)(7) shows the estimation coefficients of the simple model which considers primary balance as a function of domestic debt, output gap, and expenditure gap.…”

Fiscal Sustainability and Its Implications for Economic Growth in Egypt: An Empirical Analysis

“…This supports the view that Egypt's fiscal policy is sustainable, consistent with previous studies. For instance, Al Sayed et al (2021) used a cointegration analysis to show that the fiscal policy in Egypt was sustainable from 1990/ 1991 to 2017/2018. Similarly, Abdullah et al (2012) found a cointegration between fiscal sustainability indicators and GDP in Malaysia, indicating fiscal sustainability.…”