CAIRO: Egypt’s cabinet approved an initial draft of the state budget for the new fiscal year (FY) 2015/2016 (to start July 1) with a deficit projected to reach 9.9 percent of GDP, it said in a Thursday statement.
The 9.9 percent deficit is estimated at 281 billion EGP, compared to 10.8 percent of GDP forecasted in the current FY, and 12.8 percent in FY 2013/2014.
The draft has yet to be submitted to President Abdel Fattah al-Sisi for ratification.
Sisi had approved a revised budget for FY 2014/2015, where the gap was reduced from 292 billion EGP (14 percent of GDP) in the initial draft to 240 billion EGP (10 percent of GDP.)
“Achieving social equality and improving the standard of living for those in need is the core of this budget,” Finance Minister Hani Kadri said in the Cabinet statement.
In the draft budget, expenditure on social programs is projected to amount to 431 billion EGP, nearly 49 percent of total public expenditure and a 12 percent up from the current fiscal year.
Meanwhile, total public revenues stood at 599 billion EGP, an increase of 23.2 percent of the current fiscal year, while projected total public spending amounts to 872.6 billion EGP, an 18.5 percent increase from this FY.
Egypt’s government is working on slashing the budget deficit to eight percent of GDP in the coming four years, Youm7 quoted Minister of Investment Ashraf Salman said earlier in April.
Economic growth was projected at about five percent, compared to a projected 4.2 percent during this fiscal year, and an average of two percent over the past three year.
The International Monetary Fund upgraded its forecast for Egypt’s economic growth in 2015 to 4 percent, from 3.8 percent in its previous assessment, leaning on macroeconomic stability plans and wide-ranging structural reforms.
The fund said Egypt’s economy is projected to grow by 4.3 percent in 2016, noting that lower oil prices will reduce Egypt’s vulnerabilities as a main oil importer in the Middle East.