The final results of the 2008/09 budget balance sheet are out, Gamal Essam El-Din reports Minister of Finance Youssef Boutros Ghali announced this week that Egypt has been able to weather the storm of the global financial crisis. Ghali said the government's policy of stimulating demand by boosting spending on public services and subsidising the needs of the poor and those surviving on a limited income, was highly effective in easing the negative effects of the world financial crisis. While announcing the results of the 2008/ 09 budget balance sheet, Ghali said the budget deficit stood at just LE71.9 billion, or 6.9 per cent of GDP. "It had been expected that the deficit would be much higher but thanks to the government's fiscal stimulus package, it stood at just 6.9 per cent of GDP," the minister said. Further, Ghali explained that the government's fiscal stimulus package pushed the 2008/09 budget's public expenditure to register an increase by LE7.7 billion, from an estimated LE340 billion to a final LE347.7 or 33.4 per cent of GDP. As for revenues, the minister said the final results of the balance sheet of the 2008/09 budget show that they have increased from an estimated LE275.5 billion to LE278.6 billion. "The increase was largely due to the fact that total tax revenues increased by 18.9 per cent, registering an amount of LE163.2 billion," said Ghali, adding that "non-tax revenues also climbed by 30.2 per cent, generating an income of LE107.7 billion." He also explained that income and sales tax along with custom duties generated as much as LE154.8 billion in 2008/09. "The increase in revenues was largely due to the fiscal stimulus package which stimulated demand and pushed the bill of imports." According to Ghali, Suez Canal transit fees contributed the bulk of budgetary revenues in 2008/09. "The Suez Canal generated LE25.2 billion in 2008/09 although this is 8.4 per cent short of last year," he said. In addition, Ghali emphasised that the global financial meltdown left a very modest negative impact on the poor and limited- income classes in Egypt. "The government was very keen that the poor do not suffer or shoulder the burden of the downturn," said Ghali, indicating that "as a result, direct subsidies allocated to poor and limited-income classes grew from LE84.2 in 2007/08 to LE93.8 billion in 2008/09." Ghali said the final results of the 2008/09 balance sheet also show that the government paid particular attention to the education and health sectors. "The government increased spending on education by LE5.8 billion, pushing the total amounts allocated to this sector to climb from LE33.8 billion in 2007/ 08 to LE39.6 in 2008/09," said Ghali. He also indicated that the health sector received as much as LE15.6 billion in budgetary allocations in 2008/09, up from LE14.6 billion in 2007/08. The balance sheet of 2008/09 will be submitted to the People's Assembly for discussion within the next six months.
