Egypt’s annual budget deficit for the 2011/12 financial year was revised downwards on Tuesday to LE144 billion.
"The deficit is not expected to exceed LE144 billion, not LE150 billion as has been said by some in the media," Finance Minister Momtaz El-Said declared in a press release.
El-Said's statements followed predictions by another ministry official that the annual deficit could reach LE150 billion. The official MENA news agency on Monday had quoted Deputy Finance Minister Abdul-Aziz Mohamed Tantawi as saying that the government had raised its deficit forecast to LE150 billion from the current LE134 billion levels.
"Recent reform measures adopted by the government to rein in the deficit have succeeded," El-Said stated on Tuesday, referring to an earlier military decree cutting public expenses by LE14.3 billion. El-Said added, however, that Egypt could face additional "financial burdens" due to ongoing demands by labour groups and an increase in petroleum subsidies.
At a meeting of parliament's planning and budget committee on Monday, the deputy finance minister had said that the deficit increase had been due to measures taken by the government aimed at satisfying demands by labour groups and elections-related expenses. He went on to note that the government had allocated LE750 million to upcoming presidential elections, but that the costs incurred so far had reached some LE1.5 billion.
The initial draft of the 2011/12 budget was subsequently modified several times by Egypt's ruling military council. The first proposed deficit was set at LE170 billion, but the military council later approved its reduction to LE134 billion.
Subsequent predictions that the deficit might reach LE160 billion due to unexpected cost increases had obliged the government to revise the budget in December so as to maintain the deficit at the same levels.
According to Ahram Online's calculations, the 2011/12 budget deficit should increase to 9.1 per cent of GDP, up from 8.4 per cent of GDP for the previous fiscal year.