Egypt is planning to raise revenues by 13 to 15 percent in the 2022/23 fiscal year budget to fund wage hikes, the Deputy Minister of Finance for Financial Policies said.
Ahmed Kojak said higher revenues would help set aside provisions to improve workers’ wages, in addition to enhancing the country’s infrastructure and mitigating the government’s deficit, Al Arabiya has reported.
Egypt’s government targets to grow the economy by 5.7 percent in the 2022/23 fiscal year and to reduce the debt’s percentage of GDP to below 90 percent.
The Egyptian fiscal year starts from June and ends in July of the following year.
Previously, the Ministry of Finance raised its budget deficit forecast for the next fiscal year to 6.3 percent from an earlier 6.1 percent estimate and expected to make a primary surplus of 1.5 percent.
In other related developments, the North African country made a deficit of 3.9 percent as a share of GDP in the first half of the 2021/22 fiscal year. This is compared to 3.6 percent and 4.1 percent in the previous two years, Asharq reported, citing an interview with Mohamed Maait, the head of the Ministry of Finance.
Egypt is expected to make a primary surplus of 1.1 to 1.2 percent in the current fiscal year, reflecting the government’s ability to cover all of its expenses, excluding interest payments.
Looking at financing options, Maait said the country will issue samurai bonds – yen-denominated bonds issued in Tokyo by non-Japanese entities – before the end of June. The amount would be relatively small at $500 million or less.
Meanwhile, wheat prices could particularly hit the country’s finances with a value estimated at 12 billion pounds ($764 million) for the current fiscal year as poor weather conditions impacted the grain’s crops from different exporters. Additionally, Russia – which is usually the largest provider of wheat to Egypt – imposed taxes on exports to limit outgoing sales.
Egypt is the world’s largest importer of wheat, buying around 12.9 billion tons of the commodity for the government in 2020.