Egypt’s budget deficit narrowed to 1.9% in 1Q18-19

Egypt’s budget deficit narrowed slightly to 1.9% during the first quarter of FY2018-19, down from 2% during the same period in the last fiscal year, Finance Minister Mohamed Maait said, according to Reuters. Maait said the narrowing of the deficit indicates that Egypt is on track to meet its budget deficit target of 8.4% for the current fiscal year, according to the newswire. A government source had told us in September that the Finance Ministry was likely to amend the target to 8.6% on the back of rising US interest rates and a spike in oil prices this year. Initial budget projections had assumed an oil price of USD 67 / bbl. According to Bloomberg, every USD 1 increased above the budgeted oil price adds EGP 4 bn (USD 222 mn) to the state’s annual outlay. The recent plunge in the price of oil from a high well north of USD 80 / bbl has given the state considerable breathing room on that front.