Egypt’s budget deficit hits $11bn

Egypt’s budget deficit has registered EGP 174.6 billion ($ 11.12 billion) in the first half of the current financial year (2016-17), about 5.4 per cent of the country’s Gross Domestic Product (GDP), the Egyptian finance ministry announced in a report on Tuesday .

During the first half of the last financial year (2015-16), the deficit amounted to EGP 172.5 billion ($ 10.9 billion), amounting to 6.4 per cent of Egypt’s GDP.

Egypt’s financial year starts in July and lasts until June of the following year.

The government recently predicted the deficit to reach 10.2 per cent of GDP by the end of the current financial year.

According to the ministry report, the total GDP for the current financial year amounted to EGP 3.2 trillion ($203 billion), compared to EGP 2.8 trillion ($178 billion) during the last financial year.

Read: Egypt refuses pay rise for civil servants

The report added that the public revenues recorded EGP 219.8 billion ($14 billion) during the first half of the financial year, amounting to 6.8 per cent of Egypt’s GDP, compared to EGP 192.3 billion ($2.2 billion), which is equivalent to 7.1 per cent of the total GDP during the the same period last year.

Despite the massive financial assistance that Egypt received from Saudi Arabia, Kuwait and UAE, which amounted to more than $60 billion, since the overthrow of the former Egyptian President Mohamed Morsi in 2013, the North African country has been suffering severe financial crisis amid growing insecurity and a decline in the sources of foreign currency.

Egypt’s economy has been struggling since the 2011 uprising, with a sharp drop in tourism and foreign investment — two main sources of hard currency for the import-dependent country.

Last November, Egypt freely floated its currency against the dollar, as part of its fiscal reform programme implemented since mid-2014 in an attempt to curb a growing state budget deficit.

The reform programme, which also includes cutting subsidies and implementing new taxes, including the value added tax (VAT), has led to the receiving an initial $2.75 billion from a three-year $12 billion loan from the International Monetary Fund (IMF).