Deficit widens SURPASSING the government's and analysts' projections, the budget deficit for 2012/2013 has come in at LE240 billion, equivalent to 13.8 per cent of Gross Domestic Product (GDP). This represents a 44 per cent hike from its previous year's level and the highest deficit recorded since 2000/2001. The widening came as revenues were less than the government's projections to stand at LE345 billion and expenditures were lower than expected, due to reductions in capital expenditure, to reach LE583 billion. GDP growth for the year came in at 2.2 per cent. The cabinet said that it was targeting a growth rate of 3.5 per cent in 2013/2014, with a reduction of the budget deficit to 10 per cent of GDP. MVNO issue not decided THE FATE of the Mobile Virtual Network Operator (MVNO) licence initially set to be launched later this month is still unclear. Telecom Egypt (TE), the country's sole fixed-line operator, is the only bidder for the licence which would give it the right to offer mobile services. Al-Borsa, a local daily, quoted unnamed sources on Sunday as saying the cabinet was considering either cancelling the licence and offering 4G licences in 2015, or signing a contract with TE for the MVNO, but delaying the launch of services until next year. However, a day later Hisham Al-Alaili, head of the National Telecommunications Regulatory Authority (NTRA), told the Turkish Anadolu news agency that there was no chance of a further delay in tendering the licence. Commenting on the news, Beltone Financial said that while the licence was not considered a transformation story for TE, it would support revenue against the slowdown expected to persist in fixed lines. Qatar sends fifth LNG cargo QATAR has dispatched its fifth and last free shipment of liquefied natural gas (LNG) to Egypt. The gas-rich Gulf state pledged in June to send the five shipments comprising 16 billion cubic feet of LNG as a means to compensate foreign partners working in Egypt after they had supplied the country with extra production to deal with power cuts. Meanwhile, a wider gas-import deal between the two countries has been put on hold due to disagreements on prices and political instability. The deal would have seen British Gas and Petronas supplying the Egyptian government with 500 million cubic feet of gas daily. In return, 13 cargos of Qatari natural gas would have been exported to the two companies' customers overseas. Egypt spends $1.3 billion monthly on energy product imports to meet the increasing demands of the local market. Egypt owes oil companies $6 billion Egypt owes foreign oil partners $6 billion, prime minister Hazem Al-Beblawi told the local media last week. The cabinet aims to reschedule the debt to these companies in a way that ties rapid repayments to foreign partners with increasing the latter's exploration and production activities in the country. Al-Beblawi said he expected investments of $15 billion from these companies over a two-year period. Finance Minister Ahmed Galal told Reuters that “what is on the table is the rescheduling of these debts in a way that gives the companies an amount of liquidity that allows them to invest and make discoveries to benefit production.” Galal said he had been meeting regularly with the oil minister and the governor of the Central Bank to work out where the money would come from and tie the payments to a long-term programme to encourage alternative energy and a strategy to control subsidies.
