Egypt's budget: beginning cautiously to exit the Mubarak box

The general budget is a key document in defining a state's socio-economic policies. It reflects its social biases or balance between the interests of the poor, middle class and wage workers on the one hand, and the interests of the wealthy, and local and foreign large-scale capitalists on the other. It reflects the balance between consumption and enjoying the present through investing in the future and achieving economic leaps through major improvements in future standards of living. It also reflects the government's choice to mobilise society and state to trigger an economic boom based on self-reliance or borrowing or burdening future generations with heavy debts.

The state's general budget, which for the majority of the public remained a mystery relegated to economists, is now at the centre of genuine public interest. Thus, reviewing, analysing, simplifying and criticising it in simple terms and methods has now become the duty of economists. The goal and proof always being to fulfil the interests of the people and state of Egypt in terms of progress, development and justice.

Budget deficit and the presidential veto

The president rarely returns the budget in objection to the size of the deficit, forcing the government to review the budget once again. The final copy approved by the president, who currently holds legislative powers, shows public revenues of LE548.6 billion and public spending at LE789.4 billion. The deficit comes to LE240.8 billion, which is ten per cent of GDP forecast for 2014/2015 at LE2,403 billion. Preliminary estimates put the budget deficit at LE288 billion before the president returned the budget to the cabinet to reduce the deficit to the approved level. The budget deficit in 2013/2014 was LE243.2 billion which is 12 per cent of GDP forecast for that year at LE2,033 billion.

In the final and approved copy of the budget for 2014/2015, spending was cut to 32.8 percent of GDP compared to 36.2 percent for 2013/14. Nonetheless, it is pertinent to point out this does not mean this budget is better than its predecessor, since it is primarily an indicator of the state's socio-economic role. In France, public spending is at 48.1 percent of GDP; 46.4 percent in Britain; 44.1 percent in Belgium; 32 percent in Germany in addition to the spending of federal states; 26.8 percent in the US in addition to the spending of states. Public spending amounted to 27.2 percent of GDP in Middle East and North African countries, of which Egypt is a part.