Agency: Egypt budget deficit expected to widen to LE200 bn

Agency: Egypt budget deficit expected to widen to LE200 bn

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Mon, 31/12/2012 - 18:32

Egypt's budget deficit in the year to end-June 2013 could widen by 50 percent from the original forecast made in July, according to a figure released by the planning minister Monday.

"The budget deficit is expected to rise to LE200 billion in the current fiscal year unless strict economic policies are put in place to confront it," the state news agency quoted Ashraf al-Araby as saying Monday.

The 2012/13 budget released in July had forecast a deficit of LE135 billion compared to an actual deficit of LE166.7 billion for the previous year. Economists at the time said that forecast was optimistic.

President Mohamed Morsy earlier this month suspended a series of planned tax increases as the country prepared for a referendum on a contentious new constitution, which was passed on 22 December.

The unpopular measures were deemed necessary to secure US$4.8 billion Egypt is seeking from the International Monetary Fund, which wants Egypt to rein in its deficit.

The government said last week it would not implement the measures for at least two more weeks to give it time to explain them to different parts of society.

Prime Minister Hesham Qandil said Sunday that he expected talks with the IMF to resume in January.

Araby predicted in November that this year's deficit would be 10.4 percent of gross domestic product, without stating the figure in pounds, up from the original forecast of 8 percent.