Coinciding with the first day of Ramadan and an hour before breaking fast, the Egyptian cabinet announced that it approved the budget draft for the fiscal year (FY) 2015/2016. It set the target for deficit at 9.9% of gross domestic budget, around EGP 281bn. The approved draft stated that GDP growth is expected to reach 5% during the new fiscal year, compared to 4.2% during the current fiscal year. The budget deficit for FY 2014/2015 stands at 10.8%. Last year, the government set a goal of 10% of GDP for the deficit. In FY 2013/2014, budget deficit stood at 12.8% of the GDP. The government announced that it is expecting a 23% surge in public revenues, EGP 599bn, which will be utilized to a 12% increase in social programmes. Public spending is expected to record EGP 872.6bn, an 18.5% increase compared to the current fiscal year. The budget targets 22% increase in spending on health, surging by EGP 11.5bn to reach EGP 64bn. Spending on education will jump by 8.3%, increasing by EGP 9.2bn to reach EGP 120bn. Spending on wages are predicted to be EGP 228bn, climbing by 27.3% compared to the current fiscal year and representing 14% of the total public spending. Spending on programmes seeking "direct social protection" will reach EGP 431bn. This represents some 49% of the total public spending and a 12% increase compared to FY 2014/2015. Around EGP 11.2bn of the mentioned figure will be directed to pensions, while EGP 4.2bn will go to health insurance. Minister of Finance Hany Kadry Dimian stated that EGP 38.4bn will go to supporting the food commodities' subsidies. He added that EGP 3.7bn will be used to help and encourage local farmers. Around EGP 13.7bn will be used in supporting housing projects for low-income Egyptians, the minister said, adding that some EGP 11bn will help construct the social housing project. About EGP 75bn are expected from investments, the cabinet noted, highlighting that EGP 55bn of those investments will be financed from the government's budget. During FY 2014/2015, spending on investment recorded EGP 45bn, 22.2% less than the new set figure. Revenues from taxes are expected to record EGP 407bn. Tax income from international trade is predicted to record EGP 26.9bn in FY 2015/2016, inching up by 24.8% compared to the current fiscal year. Prior to his election, President Abdel Fattah Al-Sisi set a goal to reduce public debt to 74.5% of GDP. In the budget draft, the government states, however, that the new goal for public debt reduction in FY 2018/2019 is 85%.
