CAIRO, Jun 21 (Aswat Masriya) – Egypt’s budget deficit rose to 9.8 per cent of the country's Gross Domestic Product (GDP) in the first ten months of the current fiscal year compared to 9.5 per cent during the same period last year, the finance ministry said. 

In its monthly report, the ministry of finance said that the budget deficit amounted to EGP 273 billion during the period between July 2015 and April 2016 compared to EGP 231 billion recorded during the same period last year.

Egypt’s government expects the budget deficit for the fiscal year 2015/ 2016 to be between 11 per cent and 11.5 per cent and aims to reduce it to 9.9 per cent in the upcoming fiscal year.

The rise in the budget deficit comes amid an increase in expenditure by 8.5 per cent to reach EGP 587.6 billion compared to EGP 541.7 billion during the period under study. There was an increase in revenues by 2 per cent, amounting to EGP 327.5 billion compared to EGP 321.1 billion.

Servicing the debt garnered the largest share of the increase in expenses as it rose by 35.8 per cent compared to the same duration last year, to reach EGP 191.1 billion.

The report said that spending on the purchase of products and services rose by 12.6 per cent during this period to reach EGP 23.9 billion.

Spending on salaries and compensation offered to government employees rose by 7.5 per cent to reach EGP 169.6 billion, the report added.

Meanwhile, spending on subsidies and grants fell by 16.8 per cent to reach EGP 120.6 billion, due to the reduction in subsidies for petroleum products.

Revenues increased by 2 per cent due to a 2 per cent rise in taxes, reaching EGP 243.8 billion, as well as an increase in non-tax revenue by 2.1 per cent in the period between July 2015 and April 2016 of the current fiscal year.