Decline in tourism and business activity since the unrest broke out has hit tax revenues
Egypt's state budget deficit,
bloated after political turmoil rocked the economy, is forecast
to widen to 9.38 percent of gross domestic product (GDP) in the
2011/12 fiscal year, the country's finance minister said.
That compares with an expected deficit of about 8.5 percent
for the 2010/11 fiscal year ending on June 30, Samir Radwan told
Reuters on Monday.
Soaring prices and high unemployment fuelled pro-democracy
protests that brought down President Hosni Mubarak in February
after 30 years in power in the Arab World's most populous state.
Economists say a decline in tourism, consumption and
business activity since the unrest broke out has hit tax
revenues, which make up about 60 percent of government income.
The government has also boosted social spending in response to
protestors' demands for jobs and higher wages.
The draft budget due to be presented to the cabinet foresees
revenue of 342.6 billion Egyptian pounds ($57.6 billion) and
spending of 500.7 billion pounds, Radwan said.
Before the unrest, Egypt had predicted a deficit of 7.9
percent of GDP for fiscal 2010/11, but later revised that
upwards to 8.2 to 8.4 percent.
Planning and International Cooperation Minister Faiza Abu
el-Naga announced on Monday a development plan worth 230 billion
pounds to kick-start the economy after Mubarak's ouster.
She said that 55 percent of the plan, which still needs to
be approved by the government, would come from the private
sector. The rest would come from the public sector.
"The hope is that the private sector - local, Arab and
international investors - will contribute to this plan after
security returns to the country," she said.
The plan envisages adding 1.7 billion pounds for extra
spending on health, education, training and vocational
education, the minister said.
Egypt has said it is seeking $10 billion in funding from
international lenders and rich nations to help it cope with the
fallout from the mass protests that toppled Mubarak.
The country's economy contracted an estimated 7 percent in
January-March and the International Monetary Fund is projecting
a plunge in growth to 1.0 percent this year, well below its
long-term average, after a 5.1 percent expansion in 2010.