Egypt’s budget deficit reached LE50 billion ($8 billion) in the first quarter of the fiscal year 2012/13, which started in July 2011, Reuters reported on Thursday, citing Egyptian Finance Minister Momtaz El-Said.
The government's delay in re-structuring energy subsidies was one of reasons for the soaring deficit, he added.
State subsidies for fuel and gas are supposed to be LE70 billion ($11.4 billion) in 2012/13, a significant drop on LE95.5 billion ($15.6 billion) the previous year but the target was not achieved.
The government estimates the deficit for the current fiscal year at LE140.3-billion ($23 billion), around 7.9 per cent of GDP. This compares with a deficit-to-GDP ratio of 11 per cent in 2011/12 which was LE170 billion ($27.8).
“The estimates are completely unrealistic,” said former finance minister Samir Radwan.
Radwan explained that when he was serving as a minister in 2011 he estimated the deficit for the fiscal year then at LE134 billion ($22 billion) but given the shortage in the country’s resources and revenues against rising demand the deficit reached $27.8 billion.
“It is good for Egyptians to have an honest minister like El-Said who announces frankly the size of the deficit for July-September,” Radwan told Ahram Online.
He added that final size of the deficit by the end of the current fiscal year is difficult to predict but could be at least LE150 billion ($24.5 billion).
The quarterly bulletin of Central Bank, which highlights governmental performance during the first quarter of the fiscal year 2012/13, is not published yet.