(MENAFN- Daily News Egypt) The Egyptian government aims to cut petroleum subsidies by about 26%, and electricity subsidies by 47% in the draft budget for fiscal year (FY) 2018/19, according to Reuters.
The government document allegedly obtained by the news agency showed that the value of subsidies in the new budget amounted to EGP 89.075bn, down from about EGP 120.926bn in FY 2017/18.
The electricity subsidies budget registered at EGP 16bn, down from EGP 30bn in 2017/18.
Since the pound€™s flotation in November 2016, Egypt has cut energy subsidies twice, raising gasoline and diesel prices by around 40-50% and doubling the cost of butane cooking gas. Subsidies were cut three times since President Abdel Fattah Al-Sisi took office in mid-2014.
The cabinet referred Egypt€™s new budget for FY 2018/19 to parliament€™s planning and budgeting committee for discussion earlier this month. The new budget, which was approved by the cabinet last month, targets a GDP growth of 5.8%, a budget deficit of 8.4% of GDP, 91% public debt, and a 2% primary budget surplus.
Despite the subsidy cuts, the new budget targets increasing public salary spending to EGP 266bn, up from EGP 240bn in the current budget, and spending on social welfare to EGP 332bn, according to a cabinet statement in April.
The increase in social welfare spending aims to curb any negative effects of the upcoming subsidy cuts, which are expected to raise prices across the board.
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