
A general view taken on January 10, 2016 shows members of Egypt's new parliament meeting during their inaugural session in the capital Cairo. (AFP)
Egypt's parliament approved on Wednesday the state budget for the fiscal year starting July after sending it to the state council a day earlier.
The budget forecasts total expenditure of EGP 936 billion and revenues to reach EGP 631 billion, according the finance ministry's website.
In March, the cabinet and President Abdel-Fattah El-Sisi approved the budget bill with a 9.9 percent projected deficit, according to finance minister Amr El-Garhy.
Egypt embarked on a fiscal reform programme in July 2014 in an attempt to curb the growing state budget deficit through cutting subsidies and introducing new taxes including the value added tax.
Egypt will slash its total subsidy bill in the new budget by 14 percent in the coming fiscal year 2016/17 compared to the current fiscal year to end in June.
The 2016/17 draft budget shows total subsidy registering EGP 130.1 billion, of which EGP 46.3 billion are allocated for a food and farmers subsidy.
Parliament speaker Ali Abdel-Al told MPs that the approval of Egypt's new budget and development plan comes after two-week marathon debates.
"It was necessary to finish these debates and take a vote before the end of this month in order for this budget and plan to be constitutional," said Abdel-Al.
According to the 2014 constitution, the country's new budget and development plan should go into effect on the first of July every year.
El-Garhy said before parliament on Tuesday that the government had high hopes that the budget deficit would be greatly closed, but the economic crisis Egypt has been facing since 2011 is still acute.
"This crisis led the government to borrow a record EGP 2.7 trillion in one year," said El-Garhy.
However, he said the government still has hopes that the economy will achieve a 7 percent growth.
"This high economic growth will help us reduce the budget deficit, create a considerable number of job opportunities and help the country see an end to its economic crisis," El-Garhy said.
Representatives of political forces in parliament said they approved the budget with the stipulation that the government implement their proposals.
The Wafd Party and the Free Egyptians Party said they proposed that spending on education and health be increased to go in line with the constitution.
"The charter states that government spending on education should be at least 4 percent of GDP and spending on health should be at least 3 per cent of GDP, but the figures in the new budget have failed to meet this constitutional stipulation," said Alaa Abed, the spokesman of the Free Egyptians Party.
The leftist forces rejected the budget, describing it as hostile to poor and limited income citizens. The leftist 25-30 coalition said the new budget completely ignores social justice and will only lead to domestic unrest.
"This budget does not offer any kind of assistance to poor citizens and by contrast it aims at increasing their financial burdens in the form of imposing high electricity and water prices," said leftist and high-profile film director Khaled Youssef.
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