Egypt’s budget deficit falls 4.4% in first half of FY 2017/18

CAIRO – 14 January 2018: Egypt’s budget deficit fell 4.4 percent in the first half of fiscal year 2017/18, compared to five percent last year, a statement from the Finance Ministry said Sunday.

Egypt has been seeing improved macroeconomic indicators since it floated its local currency in late 2016.

In a recent meeting with President Abdel Fatah al-Sisi, Finance Minister Amr el-Garhy said that the primary deficit dropped to 0.3 percent of GDP in the first half of 2017/18, compared to 1.1 percent in the same period a year earlier.

He added that state revenues have increased, achieving an annual increase of 38 percent during the same period and that tax revenues have grown by around 61 percent, compared with 12 percent last year.

Egypt had embarked on a bold economic reform program that included the introduction of taxes, such as the Value added tax (VAT), and cutting energy subsidies.

The country has floated its currency in November 2016, after which it clinched a $12 billion loan from the International Monetary Fund (IMF).

Egypt is to receive a fourth disbursal of that loan, worth $2 billion, in June or July, the Finance Ministry said, bringing the total it has received to $8 billion. The IMF agreed in December to the third disbursal, also worth $2 billion.