RIYADH: Egypt’s budget deficit may top 10 percent of gross domestic product in the next fiscal year as the government responds to demands for jobs and higher wages in the wake of a popular uprising, its finance minister said.
Samir Radwan, speaking to the Egyptian community in Saudi capital Riyadh late on Monday, reiterated Egypt needed $10 billion in the fiscal year beginning in July to ease the strain.
"The budget deficit will rise to 9.1 percent, from 8.5 percent in 2010-2011," Radwan said. "And if all demands are met, it (the deficit) might go up to over 10 percent (of GDP). Next year we need $10 billion (to support the balance sheet)."
Earlier this month, Radwan forecast the deficit would surge somewhere between 9.1 to 9.2 percent of GDP in the 2011/2012 fiscal year.
He also said that Egypt is still in talks with the International Monetary Fund for a $3 billion to $4 billion loan and the country’s economy should grow faster next year than in 2011. "We are still negotiating a loan with the IMF for $3 (billion) to $4 billion," he told reporters after a meeting at Kuwait’s Chamber of Commerce and Industry.
Anti-government protests fueled by soaring prices, unemployment and repression brought much of Egypt’s economy to its knees for nearly three weeks until president Hosni Mubarak, the country’s ruler for 30 years, resigned on Feb. 11.
"Economic growth is unfortunately going down. Our estimate is 2 percent this year … next year it is about 4 percent," he said.
