Source: Cairo – Khaled Hosni
The new data announced by the Ministry of Finance indicates the return of the budget deficit phenomenon and its rise during the first 8 months of the current fiscal year 2019/2020 by 17.4% compared to the same period last fiscal year.
The monthly report of the Ministry of Finance revealed that Egypt’s budget deficit rose to record about 304.99 billion pounds during the period from July to the end of last February, compared to about 259.78 billion pounds during the same period last year, an increase of about 45.21 billion pounds.
According to these figures, the Egyptian budget deficit recorded 4.9% of GDP during the period, which is the same level during the comparative period of last fiscal year. But without calculating the debt interest expense, the budget achieved an initial surplus of 37.6 billion pounds during the period from July 2019 to the end of last February.
The data indicates that Egypt’s revenues during this period amounted to about 551.25 billion pounds, of which 422.99 billion pounds were tax revenues.
On the other hand, Egypt’s expenditures during the first eight months of the current fiscal year amounted to 851.74 billion pounds, of which 342.55 billion pounds were debt interest expenses, so debt expenditures and interest would account for 40.2% of total expenses.
The Ministry of Finance attributed the high budget deficit to the payment of the early treasury in the first quarter of the current fiscal year to about 33 billion pounds in favor of the pension fund, and it represents the full interest dues in favor of the funds for the whole year instead of paying most of the amount in June as it was followed.
In addition to the public treasury calling some zero coupon bonds and re-issuing these bonds at an interest rate less than the issuance rate by about 4%, which necessitated the payment of the interest owed on these bonds in a magnified amount of 16 billion pounds. This caused an abundance in the interest bill due on these bonds, which reduced the additional cost that the treasury will bear in exchange for re-pricing the treasury bonds in favor of the central bank at market rates of 15.5%, in addition to pricing difference bonds that change the exchange rate issued to the central bank at a value of 25 billion pounds with a return 15.5% instead of 0% as used.
This is in addition to providing financing during the first half of the current fiscal year to pay the value of Suez Canal certificates at the time they are due, at an amount close to 60 billion pounds, while providing more than 40 billion pounds to purchase additional shipments that meet the country’s needs of petroleum materials and to build a strategic stock of petroleum materials and to contribute In solving the financial tangles between the oil and electricity sectors
Also, the Ministry of Finance provided more than 80 billion pounds to pension funds as part of the settlement allocated for this year, at a value of 160.5 billion pounds.