Egypt is still working with the 2012-13 state budget, a fiscal year that already ended, while the new state budget remains in the files of the now-dissolved Shura Council.
The 2013-14 state budget was supposed to get the green light as of 1 July after Egypt's upper house of parliament approved it days before millions of Egyptians took to the streets nationwide 30 June demanding Islamist president Mohamed Morsi leave.
Morsi was overthrown 3 July after Egyptian military chief Abdel-Fattah Al-Sisi dismissed him, along with suspending the 2012 constitution and dissolving the Shura Council, in response to protest demands.
“Interim President Adly Mansour has to ratify [the 2013-14 state budget] instead of the Shura Council,” said Samir Radwan, former finance minister.
Radwan told Ahram Online that he faced this budget situation during his tenure as a finance minister, since parliament was yet to be formed and the Supreme Council of the Armed Forces had to approve the budget.
“[There are] no noticeable differences between the outgoing budget and the new one, so it will be okay to work temporarily with 2012-13 state budget,” said Radwan.
Cairo-based economist Mohamed Abu Basha pointed out that the new budget was rejected by the International Monetary Fund (IMF) when it was presented in early April amid attempts to seal an illusive $4.8 billion loan to Egypt.
“The government has to modify it, mainly to meet the preconditions of the international lender,” Abu Basha added.
The new 2013-14 state budget was believed to include a rationalisation of subsidies that represent 30 percent of total public expenses, reaching LE205.5 billion (roughly $29.2 billion).
According the state-owned Al-Ahram daily newspaper, the Shura Council reduced total expenses in the 2013-14 budget to LE589.3 billion (roughly $98.5 billion) compared to LE692.4 billion (roughly $99 billion) that was presented by the finance minister in April.
Expected revenues in 2013-14 rose in the Shura Council’s late June session to reach LE516 billion (roughly $73.3 billion) from April's announced LE497 billion (roughly $71 billion).
The 2013-14 budget deficit was expected to reach 9.5 percent of Egypt’s GDP, registering some LE197 billion (roughly $28 billion), but the Shura Council lessened it to an expected 8.9 percent of GDP.
Egypt’s total budget deficit reached LE205 billion (roughly $29.2 billion) — representing 11.8 percent of GDP — in the first 11 months of the 2012-13 fiscal year, the finance ministry reported in June.