Egypt to cut governmental expenses

Ahram Online, Sunday 8 Jan 2012

Rationalising plan will see public sector worker bonuses cut by 10 per cent while pledge to cut government operating spending by 3 per cent remains free from details

Egypt's finance minister has issued a decree detailing the expense rationalising plan for the administrative arm of the government.

The rationalising plan includes cutting bonuses for government employees by 10 per cent and governmental operating expenses by 3 per cent.

Minister Momtaz El-Said indicated in a press release issued today that cuts from government workers' bonuses will be undertaken in a way so that the principal needs of public sector employees are not affected.

The ministry has not revealed what exact savings it expects to make from these measures. Ministry officials were not available to comment on the statement.

Similarly, the minister said that the 3 per cent cut from operating expenses will be undertaken at the discretion of each government body.

In December, government officials announced an austerity plan to reduce government spending by LE20 billion in order to maintain the budget deficit at the target rate of 8.6 per cent of GDP.

Thorough details of the plan were not announced, but the government revealed its intentions to hike the prices of natural gas and electricity paid by heavy industries by 33 per cent in order to cut expenses.

The energy subsidy cuts are expected to remove LE4 billion from Egypt's expenses.

While El-Said's announcement shed more light on the government's austerity plan, details of the extent of savings remain scarce.

El-Said also indicated that the government will borrow money from the special funds that are excluded from the general budget and will be repaid in three years without interest. 

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