Egypt's newly elected president Abdel-Fattah El-Sisi announced on Tuesday that he was not able to ratify the state's budget for the coming fiscal year 2014/15, as it would raise the country's total domestic debt to LE2 trillion.
The country's total domestic debt rose to LE1.7 trillion in March 2014 up from LE1.6 trillion in December last year, according to the Central Bank's latest figures.
During the commencement ceremony at Cairo's Military Academy, El-Sisi pointed out that he rejected the submitted budget after holding a six-hour reviewing session on Monday with the ministers of planning and finance.
The budget, which should be finalised before the start of the fiscal year on 1 July, is expected to be handed back to the finance ministry for amendment.
Passed in May by the then interim cabinet for final presidential approval, the budget includes public expenditures worth LE807 billion ($112.8 billion), up 10 percent from the current budget that ends in June.
Egypt's budget deficit is forecasted in 2014/15 to reach 12 percent of GDP, or LE288 billion ($40.2 billion), up from LE240 billion ($33.5 billion) expected by end of June.
The new budget figures also assume the implementation of planned tax and state-subsidy reforms, without which the deficit would reach LE342.3 ($47.8 billion) – or some 14 percent of GDP – by the end of the next fiscal year, said the finance minister.
Meanwhile revenues are expected to reach LE517 billion, less than this year's estimate, which was buoyed by exceptional foreign grants and financial aid to Egypt totalling $20 billion.