Egypt’s budget deficit widened to LE159 billion in January, up from LE132 billion in December, according to the Ministry of Finance.
In January 2014, the deficit recorded LE119.6 billion, or 6 percent of GDP. The 2013/14 fiscal year ended with a deficit of LE252 billion or above 12.5 percent of GDP.
Seven months into the 2014/15 fiscal year, the budget deficit is equivalent to 6.9 percent of GDP, which could make it tough for the government to reach its year end target of a deficit of LE240 billion or 10 percent of GDP.
According to the Finance Ministry’s monthly bulletin for February, the government spent LE337 billion from July 2014 to January 2015, while revenue for the same period reached LE186.7 billion.
Revenue has been low in part due to a sharp decline in foreign aid—Egypt received LE7.9 billion in grants from July-January of this fiscal year, compared to LE37.3 billion in the same period the year before.
Tax revenues are also down so far, largely due to the fact that no petroleum settlements have been made this fiscal year. Increases in taxes on goods and services and property have not been enough to outweigh the decline in taxes on corporate profits.
Meanwhile, expenditures grew across the board, except for subsidy spending, again because the government has not yet settled its accounts with the state oil company.
Despite the underwhelming figures, the Ministry still struck an optimistic tone in its report, pointing to a generally positive review by the IMF of Egypt’s economic policies, the upcoming “Egypt Economic Development Conference,” and strong growth figures for the first quarter of the fiscal year.