Egypt targets less than 10% deficit in draft budget 2017/18

Egypt's Minister of Finance Amr El-Garhy has said the deficit in the draft budget for the coming fiscal year 2017/18 is expected to be lower than 10 percent of gross domestic product, citing tax revenues from both income and real estate in addition to planned investments as sources of funding.

In press statements Wednesday evening, the minister said subsidy allocations for petroleum products in the draft budget would depend on foreign currency rates and international prices, pointing out that indicators are moving toward a range of $50 to $55 per barrel.

Egypt’s budget deficit registered 5.1 percent in the first half of this fiscal year relative to GDP, down from 6.2 percent in the first half of the last fiscal year, El-Garhy said earlier this week.

The government is targeting a budget deficit of 10.1 percent by the end of the current fiscal year 2016/17.

Egypt freely floated its currency against the dollar in November, as part of a fiscal reform programme implemented in mid-2014 to curb a growing state budget deficit, which amounted to 12.2 percent in 2015/16, and revive the flagging economy.

The reform programme also included cutting subsidies and implementing new taxes including a value added tax.