{"id":546259,"date":"2022-05-10T04:00:42","date_gmt":"2022-05-10T04:00:42","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2022\/05\/10\/state-presents-revised-crisis-budget-to-the-house-with-more-spending-on-food-energy-health-and-education\/"},"modified":"2022-05-10T04:00:42","modified_gmt":"2022-05-10T04:00:42","slug":"state-presents-revised-crisis-budget-to-the-house-with-more-spending-on-food-energy-health-and-education","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2022\/05\/10\/state-presents-revised-crisis-budget-to-the-house-with-more-spending-on-food-energy-health-and-education\/","title":{"rendered":"State presents revised crisis budget to the House with more spending on food, energy, health and education"},"content":{"rendered":"

<\/a> Draft FY 2022-2023 budget presented to the House:<\/strong> The budget deficit is set to widen in the coming fiscal year as increasing social spending and rising borrowing costs cause spending to outpace revenue growth, according to projections in the draft FY 2022-2023 budget released yesterday by the Finance Ministry. Finance Minister Mohamed Maait presented the budget in the House of Representatives yesterday, saying<\/a> that the government\u2019s spending plans for the coming year will support the areas of society most affected by the economic crisis triggered by the war in Ukraine.<\/p>\n

A crisis budget:<\/strong> Prime Minister Moustafa Madbouly had directed<\/a> the Finance Ministry in March to rethink the FY 2022-2023 budget to \u201creassess priorities\u201d as the global price of key commodities including oil and wheat started rising even faster than before thanks to Russia\u2019s invasion of Ukraine. The war also threatens a key hard currency earner: Prior to the invasion, Russian and Ukrainians together accounted for nearly a third of our inbound tourism market.<\/p>\n

HIGHLIGHT #1- Rising food + energy prices will push up the subsidy spend:<\/strong> Fuel subsidies will rise more than 50% to EGP 28.1 bn while food subsidies will climb slightly to EGP 90 bn, from EGP 86 bn this year. This will increase the state\u2019s total subsidy spend to EGP 356 bn, up 11% on last year.<\/p>\n

HIGHLIGHT #2- Health + education spend to increase:<\/strong> The government will raise healthcare spending by 18% to EGP 128.1 bn. It has also made an EGP 192.7 bn earmark for education, up 12% on 2021-2022. Social protection programs will also receive more government support, with the allocation due to rise 4% to EGP 293.4 bn.<\/p>\n

HIGHLIGHT #3- Strong tax takings will underpin revenue growth:<\/strong> The government expects to increase tax revenues by almost 20% next year, rising to EGP 1.17 tn from EGP 983 bn.<\/p>\n

Spending > revenues:<\/strong> The government is expecting spending to rise 13% to almost EGP 2.1 tn next year, while revenues will increase 11% to EGP 1.52 tn, the figures show. This will widen the budget deficit to EGP 558.2 bn from EGP 475.6 bn in FY 2021-2022.<\/p>\n

Debt service costs are expected to be brought down to <\/strong>7.6% of GDP \u2014 or around a third of the total budget spend \u2014 <\/strong>compared with the 8.2% penciled in for FY2021-2022. The government also plans to reduce the debt-to-GDP ratio to 84% for the next fiscal year, and to 75% over the next four years.<\/p>\n

Debt repayments will account for half of gov\u2019t revenues:<\/strong> The government\u2019s interest bill will rise 19% to EGP 690.1 bn next year, accounting for a third of government spending and 49% of revenues. Debt as a proportion of GDP will decline to 84% from a projected 85% this year.<\/p>\n

The deficit will narrow as a % of GDP:<\/strong> The FinMin is targeting a 6.1% deficit in 2022-2023, down from a projected 6.2% this year, and is looking to improve its primary surplus to 1.5% of GDP from a forecasted 1.3% this year.<\/p>\n

Other key spending figures:<\/strong><\/p>\n