The parliament approved the new fiscal year (FY) 2017/2018 budget on Tuesday, which aims to scale down the deficit to 9.1%, as part of a fiscal austerity of the government under an expanded programme of economic reforms.
The parliament’s approval came four days after the start of the new FY 2017/2018. This means that the government is still working on the 2016/2017 budget until now. Implementing the new budget is currently pending approval by President Abdel Fattah Al-Sisi, which is expected imminently.
Egypt’s FY begins 1 July and ends 30 June of each year.
The government targets economic growth of 4.6%, against an expected growth of 3.8-4% in the past FY 2016/2017, which ended on Friday.
Prime Minister Sherif Ismail’s government is setting a target for budget deficits at 9.1%, against an expected deficit of 10.8% in 2016/2017.
Last week, the government cut fuel subsidies in the context of reforms linked to the $12bn loan programme spanning three years from the International Monetary Fund (IMF) aimed at controlling government finances and attracting foreign investors.
The IMF is expected to disburse the second tranche of the loan ($1.25bn) in the next few weeks.
Egypt has been struggling to revive its economy since the 25 January Revolution, which drove away tourism and foreign investors—two major hard currency resources.