Egypt issues 2019/20 preliminary budget

CAIRO – 1 April 2019: The Ministry of Finance issued the 2019/2020 preliminary budget draft and the Parliament will receive the draft at least 90 days before the start of the fiscal year on July 1 to have it signed into law by the end of June.

According to the draft, Gross domestic product is expected to hit about LE 6.163 trillion in 2019/2020 budget, compared with the expected LE 5.256 trillion of the current fiscal year.

The budget deficit is anticipated to hit 7.2 percent of GDP, down from 8.4 percent of 2018/2019, announcing that the government will allow new borrowing of LE 445.1 billion in the next fiscal year.

The 2019/2020 budget aims at increasing growth rates to 6 percent, focusing on comprehensive inclusive growth. The government is also seeking to create jobs for youth and reduce unemployment rates to 9.1 percent.

Revenues are foreseen to record LE 1.13 trillion, compared to the current FY's expected revenues of LE 969 billion, with an increase of 17 percent. The budget revealed that LE 856.6 billion go for tax collections with an increase of 13 percent and other earnings rise 30 percent to LE 277.8 billion.

Expenditure came at LE 1.57 trillion, compared with LE 1.4 trillion in the current fiscal year, with an increase of 12 percent. Debt service payments are expected to hit LE 569 billion, with an increase of 6.5 percent on a year on year basis.

Investment rates increase 19 percent by 2019/2020, in which government investment will rise 42.2 percent to LE 211.2 billion.

Spending on subsidies and social welfare payments will hike 3.8 percent to LE 327.7 billion, electricity subsidies will fall 37.5 percent to LE 10 billion and spending on petroleum products will be cut by 42 percent.

Moreover, Public debt is planned to reach 89 percent of GDP, achieving a primary budget surplus of 2 percent.

The exchange rate came within the Central Bank of Egypt’s (CBE) average the first two weeks (March 1 to 15) in which the dollar records LE 17.46.