Egypt will spend an additional 32 billion Egyptian pounds ($5.65 billion) on subsidies in 2010/11, but the increase will not affect the overall budget deficit, the finance minister said on Wednesday. "We have done an adjustment for the energy subsidy, but it is budget neutral," Youssef Boutros-Ghali told Reuters, after the cabinet spokesman had announced approval of the 32 billion pound supplement. Egypt's financial year starts on July 1. The minister said that when the government was drawing up the budget it had initially anticipated energy subsidies would cost more than 30 billion pounds, but that this figure later increased to over 60 billion pounds. The extra cost is booked as an accounting entry in the state-owned Egyptian General Petroleum Co., he said without explaining further. The cabinet spokesman, Magdy Rady, had earlier said the supplemental funds would be financed through an increase in the amount of petroleum and gas that Egypt exports. State media last month quoted the finance minister as saying the budget deficit would climb to 106 billion pounds in 2010/11, 8 billion pounds more than in 2009/10. Egypt has said it aims to keep the deficit at 7.9 per cent of gross domestic product in 2010/11, but to cut it to 3.5 per cent in the following five years. ($1=5.659 Egyptian Pound)
