CAIRO: The government intends to borrow 205 billion EGP in treasury bills and bonds during the 4th quarter of the current fiscal year (2013/2014), according the Ministry of Finance’s schedule of government securities released Thursday on its website.
Treasury bonds represent 30 percent of the total auctions. This proportion compromises with the Public Debt Strategy adopted by the Ministry of Finance. Egypt has had dramatic economic problems since the ouster of former President Hosni Mubarak in the wake of the January 25 Revolution, with a more than 240 billion EGP budget deficit during the fiscal year 2012/2013.
Since he took office last month, Finance Minister Hani Kadry said that the budget deficit is expected to reach between 11 to 12 percent of the country’s GDP in the 2013/14 fiscal year, according to state-owned MENA news .
Minister Kadry faces many challenges over the significant decline in economic performance in light of the escalated labor strikes and social demands. Egypt’s budget deficit surged to 13.7 percent of the country’s GDP last year, against 7.5 percent in 2010/2011.
The deficit is currently funded by Central Bank of Egypt (CBE) treasury bills and bonds, one of the governmental instruments for debts, as well as aid from Gulf states and international loans.
“The government aims to reduce the budget deficit to 10 percent,” Prime Minister Ibrahim Mahlab said in a press conference last week, Youm7 reported.
The economy needs higher production rates and tourism revenues to return to normal, added Mahlab.
In February, the Ministry of Finance and the CBE borrowed 70 billion EGP in treasury bills and bonds, according to MENA.