A 12 percent deficit in Egypt’s budget fends off investments and contributes to the current hike in inflation, Minister of Planning and International Cooperation Ashraf al-Arabi said on Thursday.
This requires taking certain measures to curb this rise, the minister stated.
Al-Arabi told the state news agency that the country’s budget deficit rose to 12 percent of the gross domestic product (GDP) during June 2012.
Egypt needs around $14.5 billion in soft loans to fill the financial gap, the minister said.
Allocations for energy subsidies alone in the general budget surpass what is spent on health and education, al-Arabi stated, adding that this is unsustainable.
As per the current fiscal year’s budget, Egypt needs to borrow $135 billion to balance the budget.
The government’s external and internal debt by June 2011 reached $1.2 trillion which is 88 percent more than the country’s GDP.