Egypt's Sisi approves 2016-17 draft budget

Ahram Online , Thursday 31 Mar 2016

The draft budget, which has been put to parliament for a vote, targets economic growth of 5-6 percent versus 4.4 percent in 2015-16

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Egypt's President Abdel-Fattah El-Sisi discussing the 2016-17 budget with Prime Minister Sherif Ismail and a number of cabinet ministers on Thursday, 31 March, 2016 (Photo courtesy of Egyptian presidency)

Egypt's President Abdel-Fattah El-Sisi approved on Thursday the 2016-2017 draft budget targeting economic growth of 5-6 percent versus 4.4 percent in 2015-16, passing it to parliament for a vote.

The cabinet passed the draft on Wednesday as a first step in the process.

Planning minister Ashraf El-Araby projected on Wednesday a total gross domestic product of EGP 3.3 trillion ($372 billion) in 2016-17, saying the government would need to attract EGP 530 billion in investments, up 16.5 percent, to reach that goal, Reuters reported.

The deficit is projected to reach 9.9 percent, finance minister Amr El-Garhy said at a news conference with El-Araby. He added that the deficit had expanded to 11.5 percent this year.

The government aims to reduce unemployment to 12 percent, El-Araby added.

Unemployment stood at 12.8 percent in December.

The newly appointed El-Garhy said the government expected 627 billion pounds in revenue including 434 billion from taxes such as the new value-added tax (VAT) which is yet to be implemented.

Total revenues in the current financial year stood at 520 billion pounds, El-Garhy said. The government plans to spend 936 billion pounds in 2016-17 versus 829 billion in 2015-16.

The government will spend 210 billion pounds on subsidies next year and 228 billion on wages.

Prime Minister Sherif Ismail promised tough action to restore growth with a government programme aimed at reducing the deficit and protecting the poor as anger mounts over a deteriorating economy.

He said the growing population of 90 million people had strained public services, while political instability since the 2011 uprising had hit growth and foreign investment.

A number of difficult reforms have been delayed, from a VAT that would increase government revenues and a civil service law that would trim the country's public workforce, to an ambitious plan to wean the country off costly energy subsidies that have been scaled back. 

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