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Egypt's budget deficit hits LE107.9 bln in five months

Ahram Online , Saturday 3 Jan 2015
Cairo's headquarters of the Egyptian ministry of finance (Photo: Al-Ahram)
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Egypt's budget deficit reached LE107.9 billion in the five months until the end of November 2014 to record 4.6 percent of GDP, compared to 3.3 percent for the same period a year earlier, the Ministry of Finance announced in its monthly report.

The government aims to cut the deficit for the current fiscal year, expected to end 30 June, to 11 percent compared to 12.8 percent in FY2013/14.

At the beginning of the current fiscal year, as president Abdel-Fattah El-Sisi took office, the government cut fuel subsidies by LE44 billion to trim budget deficits, raising pump prices by up to 78 percent.

The planned LE100 billion fuel subsidy bill is expected to drop to LE70 billion by the end of the current fiscal year as oil prices dwindle in the international markets, the petroleum minister, Sherif Ismail, said last month.

In November, a decision by OPEC to maintain their production levels for oil amid slowing demand and increasing supply saw oil prices plummet to $56.51 per barrel.

Financial consolidation measures also included raising taxes by 5 percent on the wealthiest and implementing a new property tax. Plans to introduce Value Added Tax are expected before the end of the fiscal year.

The financial monthly for December also shows that Egypt's GDP grew 6.8 percent in the three months from July to the end of September 2014 compared to the same period a year earlier.

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