Egypt will spend an additional LE 32 billion ($5.65 billion) on subsidies in 2010/11, but the increase will not affect the overall budget deficit, the finance minister said on Wednesday. "We have done an adjustment for the energy subsidy, but it is budget neutral," Youssef Boutros-Ghali told Reuters, after the cabinet spokesman had announced approval of the LE 32 billion supplement. Egypt's financial year starts on July 1. The minister said that when the government was drawing up the budget it had initially anticipated energy subsidies would cost more than 30 billion pounds, but that this figure later increased to over LE 60 billion. The extra cost is booked as an accounting entry in the state-owned Egyptian General Petroleum Co., he said without explaining further. The cabinet spokesman, Magdy Rady, had earlier said the supplemental funds would be financed through an increase in the amount of petroleum and gas that Egypt exports. State media last month quoted the finance minister as saying the budget deficit would climb to LE 106 billion in 2010/11, LE 8 billion more than in 2009/10. Egypt has said it aims to keep the deficit at 7.9 percent of gross domestic product in 2010/11, but to cut it to 3.5 percent in the following five years.
