Egypt’s President Abdel Fattah El-Sisi on Thursday ratified the state budget for the fiscal year 2015/16 following amendments by the ministry of finance to slash projected budget deficit, according to Egyptian state TV.

The cabinet on Wednesday approved the draft budget for the 2015/16 fiscal year, to reduce projected deficit to 8.9 percent of GDP, according to a statement issued by the ministry of finance.

An earlier draft that put the budget deficit at 9.9 percent had been rejected by El-Sisi, on grounds that it was too high, according to media reports.

The new state budget projects public expenditure to rise by 17 percent from the previous year to LE868 billion ($112.3 billion), while revenues are expected to reach LE622 billion ($80.5 billion), a 28 percent increase on 2014/2015.

Tax revenues will account for LE422 billion ($54.6 billion), while grants are estimated at LE2.2 billion ($285 million), compared to LE25.7 billion ($3.4 billion) in the previous fiscal year.

Fuel subsidies were set at LE61.7 billion ($8 billion) on an estimated price for Brent at $70 per barrel, while electricity subsidies were set at LE31.1 billion ($4 billion), according to the budget statement published on the ministry of finance website.

Spending on servicing Egypt’s public debt will increase by a quarter to LE244 billion ($31.6 billion). Government investments will rise by 25 percent to LE55 billion ($7.1 billion).

Egypt has set a five-year macroeconomic plan that aims to cut the state budget deficit to 8 to 8.5 percent by 2018/2019, by reforming state subsidies and introducing new taxes.

The budget deficit for the fiscal year which ended on 30 June is expected to reach 10.8 percent.

Source: Ahram Online