Egypt Revises Draft FY15/16 Budget To Cut Deficit To 8.9% Of GDP

Egypt amended again a draft budget for the 2015/2016 fiscal year and has cut the projected deficit to 8.9 percent of gross domestic product, from a projected 9.9 percent in the version released last month.

The new draft, which was published on the finance ministry’s website, projected public expenditure at 864 billion Egyptian pounds ($113 billion), from 885 billion pounds in the previous draft.

Projected revenues were raised to 622.2 billion pounds from 612 billion pounds in the previous draft.

Projected economic growth for the fiscal year was unchanged at 5 percent.

This is the second revision of the draft budget, which covers the fiscal year that runs from July 1, 2015 to June 30, 2016.

Wednesday’s draft also cut projected spending on social programmes to 429 billion pounds from a previous 431 billion pounds, and trimmed a projected subsidy on bread and food commodities to 38 billion pounds from 38.4 billion.

Projected tax revenue had been revised slightly upwards to 422.3 billion pounds from 422 billion pounds.

A finance ministry spokesman told Reuters the draft had been approved by the presidency.

TOURISM REVENUES

In the same statement as the budget, the finance ministry said that foreign direct investment in Egypt in the first nine months of fiscal year 2014/2015 was up 84 percent year-on-year.

Foreign direct investment was $5.7 billion in the nine months to end March 2015, up from $3.1 billion in the same period the previous year.

The finance ministry also said that revenues from tourism had risen by about 62 percent year-on-year in the first nine months of last fiscal year.

Egypt earned $5.5 billion from tourism in the nine months to March 2015, up from $3.4 billion for the same period in the previous fiscal year, the finance ministry said.

Tourism is a top source of foreign currency for Egypt but the industry has been under pressure in four years of political turmoil following the uprising that ousted Hosni Mubarak in 2011.

Last month a suicide bomber blew himself up near the Egyptian Karnak Temple in the southern city of Luxor.

Source: Reuters