Egypt’s budget deficit for fiscal year 2014/15 amounted to 11.5 percent of gross domestic product (GDP), the Finance Ministry announced Monday.
The 2014/15 budget targeted a deficit of 10 percent of GDP. An initial budget draft anticipated a 12 percent deficit, but President Abdel Fattah al-Sisi refused to ratify the budget unless the ministry could trim the projected deficit to 10 percent.
Overall, the state spent more and brought in less than the official budget anticipated, the ministry’s statement indicated.
Spending for the year, which ended June 30, amounted to LE733.4 billion. Government revenue for the year totaled LE465.2 billion, leaving a gap of LE268.2 billion.
The budget ratified by Sisi called for LE789 billion in expenditure, LE549 billion in revenue and a deficit of LE239.9 billion.
Final accounts for the year have still not been made public. In Monday’s statement, Finance Minister Hany Kadry Dimian said his ministry has completed the accounts and is waiting for them to be ratified by the Cabinet and the president before publication.
In the meantime, the Finance Ministry emphasized the positives.
“Financial reforms have helped restore confidence both domestically and internationally, and reduced the cost of financing the national economy,” the statement said.
Tax revenue increased by LE45.7 billion, the ministry noted.
Central Bank of Egypt figures put total tax revenue for FY 2013/14 at LE260.3 billion, implying a collection rate of around LE306 billion for FY 2014/15. The budget anticipated LE364.3 billion in tax revenue.
Dimian also noted that non-tax revenues increased by about LE33.2 billion, which helped to compensate for the sharp decline in grant money from the Gulf States. This figure is roughly in line with estimates made when the budget was released.
Proceeds from the Suez Canal Authority grew by LE300 million to reach LE34.6 billion, and non-petroleum related economic bodies increased their contribution almost six-fold to reach LE10 billion, Dimian said.
On the spending side, the minister said petroleum subsidies reached LE73.9 billion, down by around LE52.4 billion from the previous year and coming in below the nearly LE99 billion allocated for such expenditures in the budget.
Dimian also noted that spending increased in social categories, including a 14.9 percent increase in pensions, social security and other social aid. He said that spending also increased in categories like health (up 21 percent to reach LE37.2 billion, or 4 percent of GDP) and education (up 9.8 percent to reach LE92.3 billion, or 1.5 percent of GDP).
On the downside, Dimian said that economic bodies — a category that includes state-run entities like the Egyptian Radio and Television Union — continue to be a drain on the public purse. Overall, he said they ran at a deficit of around LE71.9 billion.