Egypt’s parliament approves FY 2019/20 budget targeting 7.2 percent deficit

Egypt’s parliament approved the government’s 2019/2020 budget on Monday, targeting a 7.2 percent deficit for the year and 6 percent GDP growth.

That compared with expectations of a budget deficit of 8.4 percent of gross domestic product and 5.6 percent GDP growth in the 2018/19 fiscal year that ends on June 30.

The new budget sees a debt-to-GDP ratio of 89 percent by the end of June 2020, from a projected 86 percent in the 2018/19 fiscal year.

The budget allocates 52.963 billion Egyptian pounds ($3.18 billion) for fuel subsidies, down from 89.75 billion pounds this fiscal year.

In a letter to the IMF in January, Egypt said it would remove subsidies on most energy products by June 15 as part of a three-year, $12 billion loan program with the lender.

The subsidies have yet to be lifted and the government has not said when it will raise fuel prices.