CAIRO: Egypt’s budget deficit in nine months from July to March of FY2014/2015 hiked to 9.4 percent of the country’s gross domestic product (GDP), nearly 2 percent up from 7.3 percent in the same period last year, Finance Ministry announced Friday.
The shortfall since the start of the fiscal year in July until the end of March amounted to 218.3 billion EGP ($28.61 billion,) compared to 145 billion EGP in the same period during the previous FY, the ministry said in its monthly report posted on its website.
“It is noteworthy to mention that due to exceptional and mandatory expenses, total expenditures picked up during the period of study, exceeding the impact of increased revenue proceeds,” the ministry said.
Egypt’s government is working on slashing the budget deficit to eight percent of GDP in the coming four years, Minister of Investment Ashraf Salman said earlier in April.
“Egypt has benefitted from the recent dip of oil global prices, which saved around 30 billion EGP. The amount will be allocated to health, education and infrastructure,” Youm7 quoted Salman.
Leaning on macroeconomic stability plans and wide-ranging structural reforms, 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.
In its World Economic Outlook (WEO) released in April, 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.
Budget shortfall amounted to an estimated 14 percent of the GDP of the FY 2014-2015, before President Abdel Fatah al-Sisi ratified a revised and tightened budget in which the deficit was reduced from 292 billion EGP in the initial budget draft to 240 billion EGP (10 percent of GDP), compared to a 12 percent of GDP deficit for FY 2013-2014.