CAIRO, Jan 3 (Aswat Masriya) – Egypt's budget deficit jumped by 42 billion Egyptian pounds during the first five months of the 2014/2015 fiscal year, compared to the same period of time in the past year, the ministry of finance said on Saturday.

The ministry said in its monthly report that the state's budget deficit rose to 107.9 billion pounds from July to November 2014, making up 4.6 percent of Gross Domestic Product (GDP).

The budget deficit stood at 65.9 billion pounds during the first five months of the 2013/2014 fiscal year, making up 3.3 percent of GDP, the ministry said.

Egyptian President Abdel Fattah al-Sisi approved last June the state budget for the current fiscal year, after revising it to decrease the budget deficit.

The government had drafted a budget which expected the deficit to stand at 292 billion pounds, making up 12 percent of GDP. It was amended to an expected 240 billion pound deficit, or 10 percent of GDP.

REVENUES

Egypt’s revenues meanwhile were down to 126.1 billion pounds, 5.4 percent of the GDP, compared to 126.7 billion pounds, 6.3 percent of GDP, last year, the ministry said.

The decrease is due to a 40.8 percent drop in non-tax revenues, standing at 34.5 billion pounds, whereas tax revenues increased only by 33.8 percent, to become 91.6 billion pounds.

The Finance Ministry owed the drop in non-tax revenues to the notable decrease in foreign grants Egypt received during the first five months of this fiscal year, 700 million pounds, as opposed to the 36.8 billion pounds worth of grants Egypt received during the first five months of the past year.

Egypt had received hefty foreign grants, which the ministry described as "exceptional", from neighbouring gulf countries following the military ouster of Islamist President Mohamed Mursi in July 2013.

The state's expenses also rose during the first half of this fiscal year, compared to the past one. Egypt recorded 231.8 billion pounds worth of expenss this year so far, representing 10 percent of GDP, as opposed to 190.7 billion pounds during the first five months of the past year.

DROP IN OIL PRICES

The ministry said in its report that the worldwide drop in oil prices could "positively affect" Egypt's budget deficit.

Egypt's Petroleum Minister Sherif Ismail said in December that the sum of Egypt's oil subsidies could decrease by up to 30 percent during the second half of the fiscal year 2014/2015 should the worldwide drop in oil prices persist.

Oil prices dramatically dropped worldwide during the past six months, almost by 46 percent, with no sign from oil-producing countries of an intention to slow down oil production and control the drop in prices.

The government has allocated 100 billion pounds (around 14 billion U.S. dollars) for oil subsidies in the state budget for the fiscal year 2014/2015, the minister had said.

Egypt's government has already reduced petroleum subsidies and introduced new taxes in July, hiking fuel prices by up to 78 percent. The decrease in subsidies came among a string of austerity measures introduced by Sisi's administration since his accession to power last June.

Sisi's administration has largely focused on fixing Egypt's battered economy, which has been suffering badly due to four years of political turmoil since an uprising toppled former President Hosni Mubarak in 2011.

(writing by Rana Muhammad Taha)