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.
the programme was endorsed by the International Monetary Fund, leading it to approve in November a $12 billion loan to Egypt, of which the central bank has received $2.75 billion so far.
Egypt's economy has been struggling since the 2011 uprising that toppled long time president Hosni Mubarak, with a sharp drop in tourism and foreign investment — two main sources of hard currency for the import-dependent country.
Egypt's foreign reserves rose to $26.541 billion by the end of February 2017 from $26.363 billion in January, according to the central bank.
Last month, Egypt received a total of $4 billion in yields from Eurobonds issued on the global bond market.