Egypt’s budget deficit increased by 35.8 percent to LE119.8 billion ($17.7 billion) from July to January of the 2012/13 fiscal year compared to the same period the previous fiscal year, Egypt's finance ministry stated Wednesday.

According to the ministry's monthly bulletin, the budget deficit represents 6.7 percent of Egypt's Gross Domestic Product (GDP), which currently stands at LE1.5 trillion.

The finance ministry added that the deficit increase was largely due to an increase in fiscal expenditures by 29.8 percent, which stood at LE288.9 billion (roughly $42.8 billion) in the second quarter of the 2012/13 fiscal year, compared to LE 222.6 billion (some $33 billion) for the same period the previous fiscal year.

The increase was led by rises in subsidies and social benefits, which rose by 49.9 percent to LE91.2 billion (roughly $13.5 billion) in the July-January period of the current fiscal year, compared to almost LE60.9 billion ($9 billion) during the corresponding period the previous fiscal year.

Domestic debt, meanwhile, rose to $183.6 billion in December 2012, representing 70 percent of Egypt's GDP, compared to $150.5 billion in the corresponding period of the previous year, according to the finance ministry.

On Monday, the government announced a modified economic reform programme aimed at meeting the preconditions of a proposed $4.8 billion loan from the International Monetary Fund.

If the economic recovery programme is successfully implemented, the government asserts, Egypt's budget deficit will fall by the end of the 2014/15 fiscal year to some LE183 billion, constituting almost 7.7 percent of the nation's GDP, compared to the 10.9 percent forecast for the current fiscal year.