Egypt Plans Austerity Measures to Reduce Budget for Fiscal Year
Egypt plans to cut expenditures in this fiscal year’s budget through reducing bonuses for administrative employees by 10 percent and by lowering goods- and-services spending 3 percent, according to an e-mailed Finance Ministry statement today.
“It was decided to prohibit the purchase of non-domestic products unless strictly necessary, in light of placed allocations” and without affecting the reserves of basic goods, the statement cited Finance Minister Momtaz El-Saieed as saying. Advance payments of sealed contracts contributing to the country’s investment projects are not to exceed 25 percent of the contracts’ value, El-Saieed said, according to the statement.
Egypt aims to reduce spending as it seeks aid from the International Monetary Fund. Prime Minister Kamal el-Ganzouri announced plans last month to reduce public spending by about 20 billion pounds ($3.3 billion). Finance Minister Momtaz El-Saieed said Jan. 2 that he will stick to a budget deficit target of 8.6 percent of economic output in the fiscal year that ends June 30. He also raised natural gas and electricity prices for energy- intensive industries by about 33 percent.
Egypt’s reserves tumbled after the revolt that toppled former President Hosni Mubarak in February. Foreign investors sold $7.5 billion of Egyptian treasury bills and bonds through the end of September, according to central bank data.
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