The total deficit of the Egyptian public budget during the first quarter (Q1) of the current fiscal year (FY) dropped to 2% of the GDP, reaching EGP 85.3bn, down 2.2% from EGP 76.8bn in the same period of the previous FY, according to the Ministry of Finance. According to the ministry, the deficit declined due to higher revenues that exceeded the growth of expenditures, as revenues rose during Q1 by 33.2% to EGP 129bn, compared to EGP 96.8bn in Q1 of the last FY. On the other hand, expenditures increased in Q1 this year, but at a lower pace of 24.4% to EGP 214.1bn. Tax revenues rose during Q1 by 51.5% to EGP 97.2bn, while non-tax revenues fell by 2.7% to EGP 31.8bn. Moreover, non-sovereign tax revenues have grown by 56.9%, tax revenues from goods and services were up by 71.9%, reaching EGP 55bn. Tax revenues from income, revenues, profits, and capital gains also increased by 13.7% to EGP 22.7bn. The proceeds from taxes on property during Q1 were also up by 31.7% to EGP 10.4bn, while proceeds from tax on global trade increased by 54.1% to EGP 4.6bn. According to a report by the Ministry of Finance, expenditures have increased as a result of the increase in wages by 8.8%, reaching EGP 60.2bn. Spending on buying goods and services increased by 20.2% to EGP 6.8bn, while the interest burden increased by 32.7% to EGP 76bn. Spending on subsidies, grants, and social benefits has risen by some 29.2% in Q1 to increase the subsidy on supply goods by 92.2%, next to expanding social protection programmes to mitigate the effects of rising inflation. Reham El-Desouky, economist at Arqaam Capital, said that deficit is expected to exceed the target set in the budget draft as payments for energy subsidies and social protections increased. She expected the deficit to reach 10.5% of GDP, instead of the 9% predicted in the budget draft. Minister of Finance Amr El-Garhy said in October that the total budget in the past fiscal year reached 10.9% from 12% in the previous FY
