CAIRO: Egypt announced deep cuts in energy subsidies in its budget for the 2014-15 fiscal year yesterday, a first step toward reducing the deficit after three years of political turmoil that have battered the economy.
Some 40bn pounds ($5.59bn) worth of savings were made by curbing planned spending on energy subsidies to 100.3bn pounds in the next fiscal year, Finance Minister Hany Kadry Dimian told a news conference.
President Abdel Fattah Al Sisi rejected the first draft of the budget, which comes into effect today, complaining that it was too extravagant and mounting debts would leave nothing for future generations.
Sisi approved on Sunday a tightened budget that seeks to reduce the deficit to 10 percent of gross domestic product in the next fiscal year, from an expected shortfall of 12 percent in the 2013-14 fiscal year that ended yesterday.
Dimian did not announce exactly how the energy subsidy savings would be made and said there was no timeline for petroleum price increases or other reforms for the sector.
Egypt originally budgeted 99.6bn pounds in energy subsidies for this fiscal year, but a finance ministry spokesman said
this target had not been met and the actual spending on energy subsidies was closer to 144bn pounds.
Reuters
