Egypt targets narrower budget deficit of 7% in 2019/20

CAIRO - 15 Egypt is targeting a budget deficit of 7 percent of GDP for the 2019-20 fiscal year that begins in July, compared with 8.4 percent in the previous year, according to a preliminary finance ministry budget draft.

The budget deficit is expected to reach 427.8 billion Egyptian pounds ($23.84 billion) in 2019-20.

The 92-page document that was released late on Wednesday said that the budget would target GDP growth of 6.5 percent from 5.8 percent a year earlier.

Egypt’s fiscal year ends in June.

The draft is likely to be revised before the government prepares a final draft that will be presented to parliament for approval next year.

The draft budget also said that Egypt targets an inflation level of 10.9 percent.

After easing to 13.5 percent in July, annual inflation has risen for the past three months.

Egypt has hiked fuel, electricity and transport prices over the past few months to help meet the terms of a $12 billion International Monetary Fund loan programme it signed in late 2016 that includes deep cuts to energy subsidies and tax hikes.

Tens of millions of people in Egypt, the Arab world’s most populous country, are struggling to meet basic needs after successive increases in the prices of vegetables, fruit, fuel, and medicine.

The economy has been battered by years of turmoil that began after mass protests in 2011 forced President Hosni Mubarak to step down.