CAIRO: The Ministry of Finance is scheduled to auction 64.5 billion EGP (U.S $9 billion) in treasury bills and bonds during the coming August in comparison to 79.5 billion EGP (U.S $11.1billion) last July, an inside source in the ministry told al-Arabiya Thursday.
During the first quarter of the current fiscal year, the ministry is scheduled to auction 224.5 billion EGP in treasury bills and bonds to fill the budget deficit along with meeting citizens’ growing needs.
The budget deficit for FY 2014/15 is expected to reach 10 percent of the growth rate totaling to 240 billion EGP ($33.57 billion), he added, attributing the issuance of more treasury bills and bonds to the high demand of the government’s financing needs.
Ahmed Qura, economic expert and former head of Al Watany Bank, told The Cairo Post Thursday that the 13 billion EGP decline in the offered treasury bills and bonds is considered a positive index for economic stability, shortening the budget deficit and a retreat in governmental obligations.
“The last measures of economic reform (including lifting part of the subsidy along with amending the tax system and raising the prices of electricity) could help decreasing governmental debt,” he added.
Besides measures of economic reforms, the government may not have international obligations in a few months which could help reducing governmental borrowing, explaining that international obligations include public debt services and the sums paid in oil exportation.
President Abdel Fatah al-Sisi in June rejected the initial budget proposal which featured a 292 billion EGP budget deficit for fiscal year 2014-15.
Shortly after Sisi’s refusal of the draft budget, the cabinet decided to raise prices of petroleum products. The hike ranged between 40 percent to 78 percent for petrol and 175 percent for natural gas. The move was seen as the start of austerity measures to decrease the soaring deficit.
Besides the petrol price hike, the government has imposed other kinds of taxes, like those on mortgage taxes, and a 5 percent tax for those who earn over 1 million EGP annually.
Since the January 25 Revolution in 2011 that removed Hosni Mubarak, successive governments increased their borrowing from banks operating in Egypt to cover the budget deficit, as revenues from tourism and foreign direct investment were hit by unrest.