The Ministry of Finance, Cairo (Photo: Ahram file)
Egypt's total state deficit dropped to 3 per cent of GDP in the first quarter of the current 2011/12 financial year, down from 3.3 per cent the year before, state figures on Wednesday showed.
The total deficit for the current financial year is projected at 8.6 per cent of GDP, but some analysts and officials claim it could climb as high as 11 per cent.
The drop in the quarterly deficit is attributed to a growth in revenues, partially offset by a surge in expenditures.
As both tax and non-tax income increased, total public revenues grew 23 per cent between July and October 2011, compared to the same period the year before.
Total revenues reached LE64 billion in the three months from July, up from LE52 billion last year.
Non-tax income drove the revenue growth, climbing LE10.4 billion to reach LE21.2 million in 2011 -- a surge of 96 per cent.
This growth is attributed to the surge in foreign assistance Egypt received in October, which included $500 million from Saudi Arabia and a similar amount from Qatar.
Returns from government holdings grew 57 per cent to reach LE10.4 billion. The Suez Canal, one of Egypt's main foreign currency earners, also witnessed a surge in revenues, climbing LE1.4 billion to reach LE6.1 billion over the three months.
Tax income grew by LE1.4 billion to reach LE42.8 billion, mainly due to a 30 per cent increase in Suez Canal by taxes and a hike in wage taxes.
Property taxes, which mainly comprise levies on securities holdings, increased by 17 per cent to reach LE4 billion.
The report also shows a 13.5 per cent surge in total expenditures, to reach LE110.9 billion.
The growth was mainly driven by a 25 per cent increase in wages, which reached LE35.9 billion, making up a third of total expenditures.
Subsidies also increased by LE6.4 billion to reach LE22.1 billion -- a fifth of total state expenditures.
Total social protection expenditure reached 28 per cent of total spending, with public services at 27 per cent. Education and health made up 12 and 5 per cent, respectively.