Egypt's deficit to hit 11% in FY 2014/15: Finance minister

Deya Abaza, Tuesday 16 Sep 2014

Euromoney conference shows Egypt's budget deficit hitting 11 percent, despite structural adjustments

Egypt's Finance Minster Hany Qadry (Photo: Ahmed Araf)

Egypt's budget deficit could reach 11 percent of GDP by the end of the current financial year, Finance Minister Hany Kadry Demian told the Euromoney conference in Cairo on Tuesday.

The budget forecasted for the financial year 2014/15 has expenses projected to amount to LE789 billion, with revenues at LE549 billion.

Investment Minister Ashraf Salman said on Monday that Egypt's economy needs investments between LE260-LE336 billion if it is to achieve its growth target of 3.5 percent by the end of the current fiscal year.

Political turmoil caused growth to slow to 2.3 percent of GDP in the first nine months of the past fiscal year, as the country grappled with the aftermath of a popular uprising which led to the removal of former Islamist president Mohamed Morsi by the military.

GDP is estimated to have reached 3.5 percent in the last quarter, ending in June 2014.

The government underwent severe subsidy cuts in July, slashing fuel subsidies by LE44 billion and restructuring the food subsidy system.

Recent reforms will save 2.25 percent of GDP in spending from this year's budget, said Demian.

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