Egypt’s newly-elected President Abdel-Fattah al-Sisi announced on Tuesday that he was not able to ratify the state’s budget for the coming fiscal year 2014/15, as it would raise the country’s total domestic debt to EGP 2 trillion.
The country’s total domestic debt rose to EGP 1.7 trillion in March 2014 up from EGP 1.6 trillion in December last year, according to the Central Bank’s latest figures.
During the graduation ceremony of military students in Cairo, al-Sisi pointed out that he rejected the submitted budget after holding a six-hour reviewing session on Monday with the ministers of planning and finance.
The budget, which should be finalised before the start of the fiscal year on 1 July, is expected to be handed back to the finance ministry for amendment.
Passed in May by the then interim cabinet for final presidential approval, the budget includes public expenditures worth EGP 807 billion ($112.8 billion), up 10 percent from the current budget that ends in June.
Egypt’s budget deficit is forecasted in 2014/15 to reach 12 percent of GDP, or EGP 288 billion ($40.2 billion), up from EGP 240 billion ($33.5 billion) expected by end of June.
The new budget figures also assume the implementation of planned tax and state-subsidy reforms, without which the deficit would reach EGP 342.3 ($47.8 billion) – or some 14 percent of GDP – by the end of the next fiscal year, said the finance minister.
Meanwhile revenues are expected to reach EGP 517 billion, less than this year’s estimate, which was buoyed by exceptional foreign grants and financial aid to Egypt totalling $20 billion.
Source: Ahram Online