The cabinet has approved the budget of fiscal year 2017-2018. It includes ambitious goals for economic growth and the deficit in the budget, in addition to the tax returns; however, it also includes large challenges, such as the increased foreign debt and foreign loaning pressures to finance the funding gap.
This fiscal year, Egypt has a funding gap of $11bn, which it is working to bridge through foreign loans, whether from the International Monetary Fund (IMF) or the World Bank, or by issuing bonds in international markets. This represents a solution, but it also creates pressure on paying the instalments and interests of these debts with double the amount of Egypt’s dollar resources due to the declined tourism, direct foreign investment, and exports.
Egypt aims to reduce the budget deficit to 9% of its total GDP, compared to 12.5% this fiscal year, and achieve economic growth of 4.6%, compared to 3.3% currently, which will contribute to lowering the employment rate to 11% instead of the current 12.5%.
