CAIRO: Egypt’s overall budget deficit fell to 189.4 billion EGP (around 9.3 percent of GDP) during the first eleven months of the fiscal year 2013/14, compared to 204.9 billion EGP (11.7 percent of GDP) during the same period in the previous FY, the Ministry of Finance revealed in its Economic Performance Report for July.
The ministry attributed the budget deficit decline to an increase in income tax revenues and exceptional grants, coinciding with a slower rate of investments implementation during the period of study, according to the report issued Friday.
Egypt’s budget deficit is a key challenge to the current administration that decided to cut energy, gas and food subsidies, in addition to imposing exceptional taxes in an attempt to control such a soaring deficit.
“The government is targeting fiscal and economic reforms to achieve economic revitalization, and strengthen social justice while maintaining economic stability and financial sustainability.”
In the new budget for the FY 2014/15, government revenues are estimated to reach 549 Billion EGP, recording an annual growth of 8 percent, compared to 507 billion EGP, which is expected during the fiscal year 2013/2014.
Meanwhile, government expenditures are estimated to reach 790 billion EGP with 7 percent annual growth in the new budget, according to the report.
“The budget deficit is estimated to record 240 billion EGP (10 percent of GDP), while total government debt (domestic and external) will reach a sum of 2.2 trillion EGP at the end of 2014/2015 (about 90 percent of GDP, decreasing from 93.8 percent of GDP for the fiscal year 2012/2013,” added the report.
Total revenues increased significantly during July-May 2013/2014 by 24.5 percent, recording 337.8 EGP billion (16.6 percent of GDP).
The ministry cited the rise mainly to the increase in taxes on income by 6 percent (4.8 percent of GDP), while non-tax revenues increased significantly by 86.9 percent (6.1 percent of GDP).