Egypt’s revenue generating measures started to bear fruits as state revenues for the first half of FY 2012/2013 climbed LE153 billion. The said figure is up 31 percent from LE116.6 billion over the same period of last year. Egypt’s Finance Ministry said the revenue increase can be attributed to the recently imposed stringent tax and revenue collections, rising to 39.3 percent while the non-tax revenues went up by 13.4 percent.
Just as the country’s revenues increased, its inflation rate increased by 0.6 percent to 4.7 percent in December 2012 from November 2012’s 4.1 percent. The country’s budget deficit widened further, equating to about 5.1 percent of Egypt’s gross domestic product (GDP) hauled over the same period.
The Finance Ministry said a bulk of the revenues collected by the government comes from income taxes, representing an increase of about 53 percent or about LE49.8 billion, compared to LE32.6 billion income taxes collected a year earlier.
As to expenditures, the government spent a total of LE91.5 billion during the first half of FY2012/2013, up from LE73.8 billion over the same period of last year. The increase in government spending can be traced back to the rise in subsidies, grants and other social spending, marking an increase of 38.3 percent year-on-year to reach LE78.7 billion as compared to only LE56.9 billion in the first half of the previous year. The ministry said it is expecting the deficit to widen further and breach the LE200 billion mark for the full year 2013.
Despite the ballooning budget deficit and the increase in inflation rate, the government is confident that the country will be on track as soon as the government completes the revision of its economic reform. Following the completion of the economic blueprint for country, the government is expected to seal a US$4.8 billion loan from the International Monetary Fund (IMF), the approval of which has been stalled due to the prevailing political conflict in the country.