UPDATE 2-Egypt’s 2022/23 draft budget projects spending to increase by 15%

(Adds details on projections)

CAIRO, May 9 (Reuters) – Egypt is expecting a 15% spending increase and a 14.5% budget deficit in the fiscal year which starts July 1, as it is coping with fallout from the Ukraine crisis and continuing suffering from the coronavirus pandemic, the finance ministry said. minister told parliament on Monday.

Spending for the 2022/23 financial year will rise to 2.070 billion Egyptian pounds ($112 billion) from 1.790 billion pounds this year, he said as he presented his draft budget to lawmakers.

Revenue will rise to £1.52 trillion from £1.30 trillion in 2021/22. This will result in a deficit of 558.2 billion pounds, compared to 487.7 billion previously.

“The global crisis has led to an increase in energy and food prices. The government has been able to cope with the severe and simultaneous shocks thanks to the strength of the national economy,” Mohamed Maait told parliament. .

“The budget was prepared in the shadow of dire challenges and pressures on the national economy during the international turmoil that led to rising inflation.”

The budget deficit is forecast at 6.1% of gross domestic product in 2022/23, compared to an estimated 6.2% for the current financial year.

Public debt interest payments will rise to £690.15bn in 2022/23, or 45.4% of all revenue, from £579.58bn this year. Interest payments are expected to account for 44.6% of government revenue this year.

The budget allocates £90bn to food subsidies, up from £87bn this year, the finance ministry said.

It forecasts the oil price to rise to an average of $80 a barrel in 2022/23 from $75 this year.

The government expects economic growth to slow slightly to 5.5% from 5.7% this year and inflation to remain stable at 9%.

The average interest rate on government bills and bonds will rise from 13.7 percent to 14.5 percent, the ministry said. (Reporting by Patrick Werr and Mahmoud Salama Writing by Aidan Lewis Editing by Bernadette Baum and Susan Fenton)

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