The government has spent EGP 18bn of the EGP 29bn of the first stimulus package, Minister of Finance Ahmed Galal stated on Tuesday. However, according to Al-Borsa, Galal said that the second stimulus package would be spent after an agreement is finalised with the Ministry of Petroleum to develop a programme for energy subsidies for the next fiscal year. Galal made these statements during a Tuesday conference, organised by Beltone Financial Company, titled "Egypt on the right track". The conference was attended by 40 international investment funds. The government's stimulus package will yield results by the end of Q1 2014, Galal said. The interim government adopted two stimulus packages after it came to power in July. The first package, announced in August, was valued at EGP 29.6bn; however, the value of the second one was announced in January, totalling EGP 30bn. Galal said the budget deficit is expected to be reduced to 9.5% in the 2014/2015 fiscal year, and to 8% within the coming three years, according to Al-Borsa newspaper. The minister also expects internal debt to be cut from 92% to 80% in the same period. In the 2012/2013 fiscal year, the government's budget gap registered 14% of GDP; the interim government aims to reduce it to 10% in the current fiscal year. Galal said the government is seeking to boost tax revenues to represent 25% of the GDP in the coming years, an increase from the current 15%. "This could be achieved through imposing a value-added tax and income tax," he said, adding that this cannot be achieved for the time being, as "the government is adopting an expansionary economic policy to increase growth rates." The Tax Authority reserved funds provided to public petroleum companies, as the latter have not paid their tax dues, Galal said, highlighting that he is currently working on resolving this dispute. According to state-run news agency MENA, Galal revealed that negotiations are currently underway between Egypt and Gulf countries, as the former seeks to obtain cash and in-kind assistance programmes. Following the ouster of deposed president Mohamed Morsi in July, Saudi Arabia, Kuwait and United Arab Emirates pledged a total of $12bn in assistance to Egypt. Meanwhile, Minister of Investment Osama Saleh said, during the same conference, that the government aims to obtain $4bn in foreign investments by the end of the 2013/2014 fiscal year. The total value of foreign investments during the past three years reached $9.2bn, he said, adding that it has increased by 20% after 30 June. Saleh said economic laws, particularly investment laws, are currently being revised "in order to fit the current phase" and facilitate reconciliation with investors.
