Egyptian finance minister Samir Radwan (Photo: AP)
The budget deficit will be between 9.9 and 11 per cent for the fiscal year 2011/2012, says Minister of Finance Samir Radwan. The minister said in a press release that the ministry prepared four different scenarios for expenditures in the new budget that will be presented to the Cabinet and to the public. The deficit will be between LE 155 to 185 billion depending on the scenario ultimately chosen. The release did not provide details about the different scenarios.
After the January 25 Revolution, the government raised its expectations for the budget deficit in 2010/2011 to 9.2 per cent from 7.9 per cent. Egypt is suffering from a chronic high deficit.
In 2004/2005 the government announced a plan to reduce the deficit from 9.6 per cent at the time to 6.9 per cent in 2008/2009 and down to 3.5 per cent in 2014/2015. But the international economic crisis required Egypt, like most countries, to raise expenditures to sustain consumption and investment. This led to an increased deficit of 8.2 per cent in 2009/2010.
The minister also revealed that consideration is being given to creating a LE 2 billion fund to provide aid to unemployed graduates. The aid would include six-month training programs to improve the graduates’ skills corresponding to the needs of the labour market.
Growth is now expected to be between 2.6 and 3.6 per cent in 2011/2012 as opposed to pre-revolution estimates of 6 per cent.