A Finance Ministry report issued on the state budget account from July 2009 to May 2010 revealed a 6.3-percent reduction in total government expenditure compared to the same period the previous year, to a current LE279.7 billion. The report attributed the reduction to a 42.4-percent decrease in subsidies and social benefits, on which a total of LE66 billion was spent for the period.
Foodstuff subsidies reached LE14.9 billion, a 28 percent drop from last year, while subsidies on petroleum products amounted to LE33.7 billion, down by 39.2 percent on the year.
Meanwhile, paid interest rates rose to LE63 billion, an increase of 31.2 percent from the previous year; expenditure on goods and services reached LE19.5 billion, representing an increase of 17 percent; and public investments amounted to LE36 billion, a 10-percent increase.
The report goes on to note that tax revenues from goods and services rose to LE57.6 billion, an increase of 4.6 percent, while corporate revenues from private-sector companies fell to LE40.6 billion, a reduction of 27.8 percent, as a result of adverse repercussions associated with the global financial crisis on the Egyptian private sector.
Non-tax revenues also fell by 39.5 percent; dividends from the Petroleum Authority, the Suez Canal and other economic institutions fell to LE29.4 billion, a decrease of 22.3 percent; and foreign grants fell to LE2.3 billion, a 66-percent decrease.
The drop in revenue contributed to a budget deficit of LE86.8 billion for the period, which constitutes 7.2 percent of GDP.