Egypt’s budget deficit jumped during the period from July 2012 to March 2013, reaching EGP 175.9bn, or 10.1% of GDP, compared to EGP 113bn during the same period of the previous year, at a time when spending increased at a rate faster than government revenues.
A report released on Tuesday by the Ministry of Finance regarding the country’s primary deficit ratio to GDP showed that this number increased by 4.3% over the last nine months, as opposed to 2.3% during the same period of the previous year.
The report added that state revenues increased 5.4% over the last nine months, reaching EGP 208.2bn, compared to EGP 197.5bn during the same period last year, with tax revenues increasing 17.9%, and non tax revenues decreasing 20%.
The report stated that revenues from income tax increases during the period from July 2012 to March 2013 rose 15.9%, reaching EGP 63bn, as opposed to EGP 54.3bn during the same period last year, with tax revenues on goods and services increasing 19.1%, reaching EGP 66bn, compared to EGP 55.3bn during the same period last year.
Customs duties and property taxes also rose 22.9% and 12.2%, respectively, totalling EGP 11.9bn and EGP 12bn over the last nine months, compared to EGP 9.7bn and EGP 10.8bn at the same time last year.
Decreases in non-tax revenue were attributed to a 64% lower grant rate, reaching EGP 3.2bn, as opposed to EGP 7.7bn during the same time last year, with other forms of revenue decreasing 13.2%, reaching EGP 49bn, as opposed to EGP 56.4bn during the same time last year.
Ownership returns also decreased 31.3% reaching EGP 29bn during the period from July 2012 to March 2013, compared to EGP 42.4bn during the same period last year. This came as the result of a decrease in profits for shares in Egypt’s Petroleum Authority and various economic authorities, by 46% and 12.6% respectively, reaching EGP 7.6b and EGP 1.4bn, as opposed to EGP 14bn and EGP 1.6bn during the same period last year.
Government expenditures were reported to have increased 32%, totaling EGP 382.5bn, compared to 310.8bn during the same period last year. This was attributed to an increase in spending on subsidies, grants and social benefits by 22.3%, reaching EGP 116.7bn compared to EGP 95.4bn during the same period the previous year.
Interest payments over the last 9 months increased by 30% reaching 101.5bn, compared to EGP 78bn during the same period last year, while increases in government salaries and worker compensations increased 23.9%, reaching EGP 102.7bn, compared to EGP 72.9bn during the same period last year.
The purchase of non-financial assets meanwhile (investments) also rose 13.9% over the nine month period from July 2012 to March 2013, reaching EGP 21bn compared to EGP 18.5bn at the same time last year.
Monthly increase in the rate of domestic liquidity rose since last January by 2.7%, the highest growth rate recorded since June 2012, reaching EGP 1198bn, compared to EGP 1167.2bn by December 2012, with yearly growth rates for domestic liquidity increasing 14.7% by last January, as opposed to 12.3% in December 2012, and 7.6% compared to January 2012.
The report also stated that annual inflation decreased by 7.6% by last March compared to 8.2% during the previous month of February, a 9% decrease compared to March 2012. Annual inflation rates since last March reached 8.2%, compared to 8.7% during the previous month of February, a 9.5% drop compared to March 2012.