Egypt raises budget deficit estimate ahead of loan talks
CAIRO - Egypt's budget deficit will grow to 150 billion pounds ($24 billion) for the current fiscal year which ends in June, a finance ministry official said on Monday.
Abdel Aziz Tantawi told a parliamentary committee that the budget deficit, which last year was estimated at 134 billion pounds ($21.4 billion), will grow due to election expenses and social spending, the state MENA news agency said.
His remarks come as Cairo is holding talks with the International Monetary Fund for a $3.2 billion loan to shore up its economy which has suffered since the uprising that overthrew president Hosni Mubarak in February last year.
The 2011-2012 fiscal year in Egypt ends in June.
The revolt led to a sharp economic slowdown after years of annual growth of between five and seven percent and delivered a major blow to the lucrative tourism sector which is still struggling to recover.
The economy took another beating as a result of rising public spending, including the costs of a multi-phase parliamentary election concluded earlier this year and of a two-stage presidential election due in May and June, MENA said.
Egypt's foreign currency reserves fell from $36 billion at the start of the year to $15.5 billion at the end of February, according to the central bank.