Egypt’s subsidy bill for petroleum products declined 77 percent to EGP18.6 billion ($1.19 billion) in the financial year (FY) 2019-20 that ended in June 30, the finance ministry said in a statement on Saturday.
It was aiming that the petroleum subsidy hits EGP52.9 billion in FY 2019-20 and now targets amounting it to EGP28.193 billion in the current FY.
The country’s subsidy bill for staple commodities fell 7.6 percent in the same year to EGP80.4 billion ($5.16 billion), the statement said.
Egypt supports more than 60 million citizens through ration cards, and the government allocates 50 pounds per month to each citizen registered in the ration cards system to buy the commodities he or she needs.
Finance Minister Mohamed Maait expects the economy to grow between 2.8 and four percent in the current fiscal year 2021-22 that began in July.
Egypt had hoped for growth between six and 6.5 percent before the coronavirus pandemic, according to Maait’s televised statements on Friday.
According to the finance ministry’s circular on the draft budget for the 2021-22 FY, Egypt aims to reduce the total budget deficit to 6.5 percent of the gross domestic product (GDP).
The country expects to reduce the overall deficit of the 2020-21 FY to 7.5 percent from 7.9 percent in the previous one, and a primary surplus at 0.5 percent.
In the circular dated October 2020, the ministry added that the government is targeting an unemployment rate of six percent in the FY 2021-22 and a decline in the unemployment rate to 7.3 percent in the third quarter of 2020, compared to 7.8 percent in the same period in 2019.
The circular pointed out that the government targets an average interest rate on government bills at 13 percent in the FY 2021-22 budgets from the 13.5 percent expected in 2020-21.
The government declared it expects government debt to rise to 88 percent of GDP in the 2021-22 FY from the projected 83 percent in the current fiscal year.
The finance ministry targets an inflation rate of nine percent in FY 2020-21, with plus or minus three percent, compared to the 5.7 percent expected in the current fiscal year, the circular added.
Urban consumer price inflation rose to 4.5 percent year on year (YoY) in October, from 3.7 percent in September.
The ministry did not publish the real economic growth rate expected in 2021-22 and said “preparations are underway by the Ministry of Planning and Economic Development.”