Egypt's cabinet has approved a new draft budget for the 2015/16 fiscal year to slash the projected deficit to 8.9 percent of GDP, according to a statement issued by the Ministry of Finance on Wednesday.

Projected public expenditure is set to rise 17 percent from the previous year to LE868 billion, while revenues are expected to reach LE622 billion, a 28 percent increase on 2014/2015.

Tax revenues will account for LE422 billion, while grants are estimated at LE2.2 billion, compared to LE25.7 billion in the previous fiscal year.

An earlier draft which put the budget deficit at 9.9 percent had been rejected by Egypt's president Abdel-Fattah El-Sisi, on grounds that its target deficit of 9.9 percent was too high, according to media reports.

The president has not yet finally ratified the latest draft, Ministry of Finance spokesperson Ayman El-Qaffas told Ahram Online at the time of writing. 

The budget deficit for the fiscal year which ended on 30 June was set at 10.8 percent.

The government says that 50 percent of budgeted spending is allocated to social security programmes, which will see an extra LE45 billion in allocated funding this year, or 11.8 percent more than last year. Wages spending will increase by 8.6 percent on the previous year to amount to LE118 billion.

Egypt has set a five-year macroeconomic plan that aims to cut the state budget deficit to 8 to 8.5 percent by 2018/2019, by reforming state subsidies and introducing new taxes.

Wednesday's statement did not specify the amount allocated for fuel subsidies, which last year was set at LE100 billion but effectively only reached LE70 billion due to a steep fall in global oil prices.

Spending on servicing Egypt's public debt will increase by a quarter to LE244 billion. Investments will rise 25 percent to LE55 billion.