Egypt 2011/12 budget deficit less than expected

Egypt’s budget deficit reached LE136.5 billion in the first 11 months of the 2011/12 fiscal year but remained significantly below the level predicted by government and experts, finance ministry data shows. The deficit for the period between July 2011 and May 2012 accounts for 8.8 per cent of GDP. It compares with LE112.6 billion over the same period in the 2010/11 financial year. Data for the entire year is still to be published, but the 2011/12 budget which finished on 30 June indicated a deficit of 7.8 per cent. Egypt's interim government, however, overspent during the first half of the fiscal year prompting Prime Minister Kamal El-Ganzouri to adopt a mini-austerity scheme in a bid to cut expenses by LE14-20 billion. Ganzouri later revised the 2011/12 budget deficit to LE144 billion, or 9.2 per cent of GDP. Cairo-based investment bank Beltone Financial on Sunday said the new data was "lower than our expectations". It had earlier predicted a budget deficit of LE160 billion, equivalent to 11 per cent. "[The lower budget deficit was caused] primarily on savings on expenditure items that were introduced by PM Ganzouri and efforts to raise tax revenues," the bank said in a note. From ahram