Egypt’s parliament approves FY 2019/20 budget targeting 7.2% deficit

An attendant fills the tank of a car at a petrol station in Cairo, Egypt. (Reuters)
Updated 24 June 2019
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Egypt’s parliament approves FY 2019/20 budget targeting 7.2% deficit

  • The new budget sees a debt-to-GDP ratio of 89% by the end of June 2020, from a projected 86% in the 2018/19 fiscal year
  • The budget allocates 52.963 billion Egyptian pounds ($3.18 billion) for fuel subsidies, down from 89.75 billion pounds this fiscal year

CAIRO: Egypt’s parliament approved the government’s 2019/2020 budget on Monday, targeting a 7.2% deficit for the year and 6% GDP growth.
That compared with expactations of a budget deficit of 8.4% of gross domestic product and 5.6% GDP growth in the 2018/19 fiscal year that ends on June 30.
The new budget sees a debt-to-GDP ratio of 89% by the end of June 2020, from a projected 86% in the 2018/19 fiscal year.
The budget allocates 52.963 billion Egyptian pounds ($3.18 billion) for fuel subsidies, down from 89.75 billion pounds this fiscal year.
In a letter to the IMF in January, Egypt said it would remove subsidies on most energy products by June 15 as part of a three-year, $12 billion loan program with the lender.
The subsidies have yet to be lifted and the government has not said when it will raise fuel prices.


‘Huge increase’ in crude prices not expected: IEA executive director

Updated 19 July 2019
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‘Huge increase’ in crude prices not expected: IEA executive director

  • The International Energy Agency is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day
  • IEA’s Fatih Birol: Serious political tensions could impact market dynamics

NEW DELHI: The International Energy Agency (IEA) doesn’t expect oil prices to rise significantly because demand is slowing and there is a glut in global crude markets, its executive director said on Friday.
“Prices are determined by the markets ... If we see the market today, we see that the demand is slowing down considerably,” said IEA’s Fatih Birol, in public comments made during a two-day energy conference in New Delhi.
The IEA is revising its 2019 global oil demand growth forecast down to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Birol told Reuters in an interview on Thursday.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd. But in June this year it cut the growth forecast to 1.2 million bpd.
“Substantial amount of oil is coming from the United States, about 1.8 million barrels per day, plus oil from Iraq, Brazil and Libya,” Birol said.
Under normal circumstances, he said, he doesn’t expect a “huge increase” in crude oil prices. But Birol warned serious political tensions could yet impact market dynamics.
Crude oil prices rose nearly 2 percent on Friday after a US Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows.
Referring to India, Birol stressed the country could cut its imports, amid rising oil demand in the country, by increasing domestic local oil and gas production.
Prime Minister Narendra Modi had set a target in 2015 to cut India’s dependence on oil imports to two-thirds of consumption by 2022, and half by 2030. But rising demand and low domestic production have pushed imports to 84 percent of total needs in the last five years, government data shows.
Meanwhile, the IEA doesn’t expect a global push toward environmentally friendly electric vehicles can dent crude demand significantly, Birol said, as the main driver of crude demand globally has been petrochemicals, not cars.
He said the impact of a serious electric vehicle adoption push by the Indian government would not be felt immediately.