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Egypt Sees Budget Deficit Narrowing to 5.6% of GDP this Year

This picture taken on August 24, 2022 from the landmark Cairo Tower shows a night-time view of vehicles driving past lit-up billboards along the "October 6" highway running through the Zamalek district (R) of Egypt's capital Cairo to the Agouza district (L) in its twin-city of Giza. (AFP)
This picture taken on August 24, 2022 from the landmark Cairo Tower shows a night-time view of vehicles driving past lit-up billboards along the "October 6" highway running through the Zamalek district (R) of Egypt's capital Cairo to the Agouza district (L) in its twin-city of Giza. (AFP)
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Egypt Sees Budget Deficit Narrowing to 5.6% of GDP this Year

This picture taken on August 24, 2022 from the landmark Cairo Tower shows a night-time view of vehicles driving past lit-up billboards along the "October 6" highway running through the Zamalek district (R) of Egypt's capital Cairo to the Agouza district (L) in its twin-city of Giza. (AFP)
This picture taken on August 24, 2022 from the landmark Cairo Tower shows a night-time view of vehicles driving past lit-up billboards along the "October 6" highway running through the Zamalek district (R) of Egypt's capital Cairo to the Agouza district (L) in its twin-city of Giza. (AFP)

Egypt expects more progress on reducing its budget deficit this year and a foresees a decline in its debt ratio after currency devaluations caused it to rise last year, Finance Minister Mohamed Maait told a news conference on Monday.

The deficit was expected to narrow to 5.6% of gross domestic product (GDP) in the fiscal year that began on July 1, from 6.1% in 2021/22, he forecast. It would fall still further in 2023/24 to 5%.

The budget had a primary surplus of 1.3% last year, its fifth year of such surpluses, he added.

The debt-to-GDP ratio would fall to 82.5% this year from 87.4% last year and 84.6% in 2020/21. Maait had expected the ratio to fall last year, but devaluations in the first half of 2022 had added four percentage points to the total, he said.

The Egyptian pound weakened to 18.76 to the dollar as of June 30 from 15.66 pound on Jan. 19.

Egypt was continuing negotiations with the International Monetary Fund begun in March, Maait said, adding that the fund had not asked Egypt to reduce subsidies on bread as had been reported in some media.

The IMF last month said Cairo still needed to make "decisive progress" on fiscal and structural reform.

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Oil Prices Stable on Monday as Data Offsets Surplus Concerns

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Stable on Monday as Data Offsets Surplus Concerns

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices stabilized on Monday after losses last week as lower-than-expected US inflation data offset investors' concerns about a supply surplus next year.

Brent crude futures were down by 38 cents, or 0.52%, to $72.56 a barrel by 1300 GMT. US West Texas Intermediate crude futures were down 34 cents, or 0.49%, to $69.12 per barrel.

Oil prices rose in early trading after data on Friday that showed cooling US inflation helped alleviate investors' concerns after the Federal Reserve interest rate cut last week, IG markets analyst Tony Sycamore said, Reuters reported.

"I think the US Senate passing legislation to end the brief shutdown over the weekend has helped," he added.

But gains were reversed by a stronger US dollar, UBS analyst Giovanni Staunovo told Reuters.

"With the US dollar changing from weaker to stronger, oil prices have given up earlier gains," he said.

The dollar was hovering around two-year highs on Monday morning, after hitting that milestone on Friday.

Brent futures fell by around 2.1% last week, while WTI futures lost 2.6%, on concerns about global economic growth and oil demand after the US central bank signalled caution over further easing of monetary policy. Research from Asia's top refiner Sinopec pointing to China's oil consumption peaking in 2027 also weighed on prices.

Macquarie analysts projected a growing supply surplus for next year, which will hold Brent prices to an average of $70.50 a barrel, down from this year's average of $79.64, they said in a December report.

Concerns about European supply eased on reports the Druzhba pipeline, which sends Russian and Kazakh oil to Hungary, Slovakia, the Czech Republic and Germany, has restarted after halting on Thursday due to technical problems at a Russian pumping station.

US President-elect Donald Trump on Friday urged the European Union to increase US oil and gas imports or face tariffs on the bloc's exports.

Trump also threatened to reassert US control over the Panama Canal on Sunday, accusing Panama of charging excessive rates to use the Central American passage and drawing a sharp rebuke from Panamanian President Jose Raul Mulino.