By Doaa Hussein
The Egyptian Finance Minister, Hany Kadry, held a meeting last Wednesday Dec. 9, with the officials responsible for the general budget, to reduce the previously targeted monetary deficit, which amounts to EGP 251bn (about 8.9 per cent).
The minister addressed the attendees to start rationalizing monetary subsidies, restructuring wages, as well as listing the general debt, without harming low-income citizens.
It is noteworthy that the general budget deficit has raised from July to September 2015 around 78.3 billion pounds (2.8 per cent), compared to 65.76 billion pounds in the same period last year. Predicting a much higher deficit ranging from 10.5 to 11 per cent in 2015/2016 fiscal year, according to the statements of a high official in the ministry of finance to Veto.
This is the second time the finance ministry modifies the country’s deficit, after El-Sisi’s rejection last month, of the previously suggested 9.8 per cent raise.
Causes of the high deficit
The dollar high-rates against the Egyptian pound is considered to be the biggest factor in increasing the deficit of Egypt’s general budget, according to experts. It all take place in the wake of slumping oil prices which leads the dollar on top of most the other currencies.
The mounting local debt, totaling EGP 2.2 trillion, comes as the second cause, alongside the $ 46 billion foreign debt, as f the Egyptian central bank report of last June.
Experts also refer to the late energy investments and the implementation of the added value tax, which were planned by the first quarter of this fiscal year, as major contributors to the deficit.
One more reason of budget deficit is the transformation of private fund stocks to the Central bank’s treasury accounts, which led to the absence of EGP 4.4bn, shaping a strong aid for the general balance.
