Public expenses will be cut by LE14.3 billion to reduce deficit

New public spending cuts will affect wages, government purchases, subsidies and debt services, according to a SCAF decree

A decree to cut public expenses by LE14.3 billion ($2.37 billion) has been issued by Field Marshal Hussein Tantawi, head of the Supreme Council of the Armed Forces (SCAF).
The cut aims at reducing budget deficit for the fiscal year 2011/2012. The government announced in December that it intends to cut the budget deficit by LE20-23 billion, without giving details.
The savings will touch wages, government purchases, subsidies and debt services.The biggest cut will touch wages (by LE4 billion or $663 million), according to Momtaz Al-Said, minister of finance.
The government said last month it would impose a maximum wage for public employees shortly.
Another LE3 billion will be saved from wages reserves.
Energy subsidies and their reserves should also decrease by LE3.3 billion, due to a cut on subsidies for energy intensive industries.
Government purchases will be cut by LE1 billion and debt service should be cut by another LE1 billion, through debt restructuration.
Finally, LE1.5 billion will be cut from public investments and LE0.5 billion from various reserves.