Minister of Finance, Mr. Hany Kadry Demian declared that the first general budget draft for fiscal year 2014/2015 was submitted to the President, Abd El Fattah El Sisi with a deficit that reached 292 billion EGP., i.e. 12.2 % of GDP. The budget draft included the financial impacts of several procedures, however it did not include the same grants included in the current fiscal year 2013/2014.

The Minister declared that the discussions concluded by competent sectors in the Ministry of Finance along the state entities regarding the State’s general budget draft, comprised many demands of such entities. Ministry of Finance considered the said demands are exaggerated and shall lead to increasing deficit to reach the ratio of 17 % of GDP, i.e. more than 400 billion EGP, the Ministry rejected such procedure and decreased deficit to 350 billion EGP. as a first phase, i.e. the ratio of 14.6 % of GDP.

The Minister added that the government adopted a reform procedure package for the amount of 60 billion EGP. to rationalize energy subsidy, expand tax base to include incomes and economic activities away from poor and low income groups, fighting tax fraud by promoting information system, as well as reducing harmful tax avoidance by introducing a new law provision in this regard.

The Minister stated that the President El Sisi instructed the government to work within the current economic outlook and to stop ineffective and unproductive spending which is not directed to ordinary citizens, especially with the very increased budget deficit and improper debt service which inevitably will affect the state’s development abilities and rights of the coming generations. The Minister indicated that the President called for the provision of the required resources needed for promoting investment and development plans without borrowing as much as we can.

It is worth noting that the cabinet will discuss Wednesday morning the amendments introduced to the budget draft in order to resubmit it to the President El Sisi, with the obligation no to increase deficit more than the current fiscal year, to consider the proper social protection to the most needy groups and to provide supply and food commodities for citizens at affordable prices in all governorates throughout the year.