Egypt’s budget deficit in the 2017/18 fiscal year recorded 9.8 percent of gross domestic product (GDP) down from 10.9 percent in the previous fiscal year, according to a Thursday statement released by Finance Minister Mohamed Maeet who cited the budget final account. 

This is the first time the deficit has fallen below the 10 percent benchmark for six years, Maeet added.

It is also the first time in 15 years for the final state budget account to record a primary surplus, with Egypt registering a profit of EGP 4.4 billion in 2017/18 fiscal year (nearly $250 million).

Primary balance, however, does not take into consideration interest payments on outstanding government debt. 

This year’s surplus was used to repay debt interests, the finance minister said.

The amount of debt interest repaid by the government increased by 38.3 percent in the last fiscal year 2017/18, recording EGP 438 billion ($ 24.5 billion).

Proceeds from taxation recorded EGP 566 billion ($ 31.6 billion) at the end of fiscal year 2017/18, a 27.7 percent increase compared to last fiscal year 2016/17, and 28.2 percent higher than the targeted figure in the budget.

This was driven by an increase in income tax proceeds from EGP 78 billion to EGP 304.5 billion ($ 4.4 billion - $17.4 billion), and an increase in proceeds from value-added tax from EGP 79 billion to EGP 261.6 billion ($4.4 billion-$14.6 billion).

Subsidies allocated for supply commodities, including sugar, oil, lentils, and pasta, increased to EGP 80.5 billion, up from EGP 47.5 billion last year ($ 2.6 billion -$4.5 billion).

The state bill allocated to the Takaful and Karama social security programmes for lower income citizens also increased by EGP 10 billion, to total EGP 17.5 billion in the financial year 2017/18 ($5559.5 billion - $979.3 billion).