Egypt sees 2012/13 budget deficit at 10.4 pct of GDP

Reuters Middle East

CAIRO, Nov 24 (Reuters) - Egypt expects its budget deficit

to be 10.4 percent of gross domestic product in the financial

year ending June 2013, coming in below the 11 percent or so it

reached in 2011/12, a minister said on Saturday.

The figure of 10.4 percent is well above the 8 percent or so

originally forecast for 2012/13, but economists and government

officials had said the original estimate was optimistic as it

was based on austerity measures that have yet to be taken.

Planning and International Cooperation Minister Ashraf

al-Araby outlined the new 10.4 percent forecast for the deficit

this year at a news conference and repeated the government's

plan to rein the deficit in to 8.5 percent in 2013/14.

Egypt said it had agreed with the International Monetary

Fund to cut back the deficit in talks that ended this week in

Cairo and which that led to a preliminary deal for a $4.8

billion IMF loan to support the battered economy.

Egyptian officials had put the 2011/12 budget deficit at 11

percent. Prime Minister Hisham Kandil told Reuters this week it

was 10.8 percent and said Egypt would issue a supplementary

budget to amend the 2012/13 budget after any IMF deal.

Among measures planned are steps to curb spending on fuel

subsidies, which includes terminating subsidies on 95-octane

fuel, the highest grade available, and introducing quotas in

April for drivers to buy lower grades at subsidised prices.

Drivers currently pay well below real costs for their fuel,

which is a big drain on state coffers.

Araby also announced Egypt, a gas producer and exporter,

would start importing gas in the second quarter of 2013, running

April to June, a move that may help Egypt meet its own export

contracts while domestic demand rises.

Egypt said in October it had agreed to import Algerian gas

and was in talks with Qatar for a similar deal.

Egypt has two liquefied natural gas (LNG) plants and a

pipeline to export gas, but energy industry sources say the

government has been diverting some gas contracted for export to

the domestic market, which suffered fuel shortages and

electricity cuts in the summer.

(Reporting by Tamim Elyan; Writing by Edmund Blair, editing by

William Hardy)

By using Yahoo you agree that Yahoo and partners may use Cookies for personalisation and other purposes