Egypt: budget deficit rises to 9.2% of GDP in first nine months of FY2015/6

Egypt’s budget deficit surged to 9.2 percent of the country’s GDP during the first nine months of the current financial year of 2015/2016, compared to 9 percent during the same period last year, the finance ministry announced on Friday.

In a monthly report published by the state-run news agency MENA on Thursday, the ministry said that the budget deficit recorded 254.9 billion Egyptian pounds (around $28.7 billion) during the period between July 2015 and March 2016 compared to 218.3 billion pounds (around $24.6 billion) recorded during the same period last year.

Earlier in May, the ministry valued the budget deficit at 223 billion pounds (7.9 per cent of the GDP) during the first eight months of the fiscal year 2015/2016 compared to 186 billion pounds during the same period last year.

The government expects the deficit for the fiscal year 2015/2016 to be between 11-11.5 per cent as a percentage of the GDP, while it aims to reduce it to 9.9 per cent in the upcoming fiscal year.

The report said total revenues increased by 3.2 per cent to record 291.1 billion pounds compared to 282.1 billion pounds during the same period last year. The ministry attributed the increase to an increase in tax revenues by 3.7 per cent to record 212.4 billion pounds, in addition to an increase in non-tax revenues by 1.9 per cent, which reached 78.7 billion pounds during the surveyed period.

Total expenses increased by 8.7 per cent to reach 533.3 billion pounds during the first nine months of the current fiscal year compared to 490.6 billion pounds during the same period of the previous fiscal year, according the report.

The report also pointed to an increase in the expenses allocated to salaries and compensation offered to government employees by 8.7 per cent, the lowest increase rate compared to the past three years in the light of the reforms that the ministry has undertaken to control the wage bill.

The government’s spending on subsidies, grants and social benefits fell by 20.2 per cent to reach 106.4 billion pounds compared with 133.4 billion pounds during the same period last year in view of the decline in subsidies for petroleum products.

Source: Aswat Masriya