LE 1.9B primary surplus in 2017/2018 budget: Minister

CAIRO – 12 June 2018: Minister of Finance Amr el-Garhy said that the actual results of the budget of July to May 2017/2018 emphasize the improvement of the financial indicators in light of the comprehensive economic reform program and the improvement of the economy.

The budget achieved a primary surplus, for the first time in more than 10 years, amounting to about LE 1.9 billion, compared to a primary deficit of LE 47 billion during the same period of the previous fiscal year, the minister stated.

He pointed out that the period July-May 2017/2018 witnessed a marked improvement in controlling the overall deficit rate to be lowered to 7.8 percent of the gross domestic product (GPD), compared to 9.3 percent during the same period of 2016/2017 and an average of 10.6 percent during the past three years.

Garhy affirmed that these results reflect the ability of the government to achieve the declared and targeted financial goals for the fiscal year 2017/2018, which is the transformation to achieve a primary surplus of 0.1 percent of GDP, achieving total deficit of 9.8 percent of GDP.

The revenues hiked during July-May to achieve 35 percent which exceeded the annual rate of the expenditures which is 24 percent, the minister declared.

Garhy added that tax yields also climbed 45 percent compared to an average of 20 percent during the last three years.

As per expenditures, the wages rose 11.5 percent in light of the payment of the periodic and special bonuses, which benefit about 6 million employees.

The government investments also increased 23 percent to reach LE 75 billion, of which LE 57 billion are financed by the deficit, reflecting the interest of the budget; the Ministry of Finance will provide the necessary financial allocations to improve the infrastructure and services provided to citizens in all governorates.

The Ministry of Finance said earlier that the budget deficit has reached LE 218 billion during the first half of 2017-2018, marking 5.1 percent of GDP.

The report stated that revenues increased to LE 353.7 billion during H1 of fiscal year, up from LE 273.2 billion in the previous year. Tax revenues rose to LE 291.9 billion from LE 198.7 million.

The report also pointed to an upturn in expenditures to LE 570.2 billion in seven months compared with LE 464.4 billion during the same period in the previous fiscal year.

The Central Agency of Mobilization and Statistics (CAPMAS) stated earlier that state revenues in the second half (H2) of the current fiscal year (2017/18) stood at LE 302.5 billion, of which LE 249 billion are tax revenues.

The data revealed that tax revenues, which include income tax and other forms of taxes, captured 82.3 percent from the total revenues in H2 of the fiscal year. Other sources of revenues constituted 17.7 percent.

Finance Minister Garhy said in April that his ministry targets to increase taxes to 17-18 percent of GDP, up from the current 14 percent.

For the current fiscal year, the budget deficit is estimated to record LE 370 billion, and it is planned by the ministry to be financed through treasury bills and bonds as well as international and Arab loans.