Egypt's budget deficit drops to 10.9 percent in 2016/17

Ahram Online , Tuesday 8 Aug 2017

Central Bank of Egypt
Central Bank of Egypt's headquarters is seen in downtown Cairo, Egypt, November 3, 2016. (Reuters)

Egypt's budget deficit for the fiscal year 2016/17 stood at 10.9 percent as opposed to 12.5 percent the year before, a statement by the presidency said on Tuesday.

Egypt is implementing sweeping reforms to curb its crippling budget deficit, including cuts in energy subsidies, the introduction of a value-added tax (VAT) and floating the pound.

Gross domestic product (GDP) growth in the fourth quarter of 2016/17, which ended in June, was at 4.9 percent, while total GDP growth for the year stood at 4.1 percent.

Foreign investment in Egypt's treasuries in 2016/17 surged to $13 billion by the end of June, compared to $1 billion at the start of the year, the statement added.

Egypt's fiscal year begins in July and ends in June.

The Central Bank of Egypt has raised its key interest rates by 700 basis points since it floated the pound in November, increasing demand for the country's domestic debts.

Egypt's commodity exports in 2016/17 rose by 10 percent and imports declined by 14 percent, while the country's trade deficit narrowed by 26 percent.

Annual growth rate of revenues for the year stood at 28 percent of GDP while growth rate of expenditure was at 22 percent of GDP, according to state news agency MENA.

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