Egypt recorded a budget deficit of EGP 462 bn — or 7.9% of GDP — in FY2019-2020, according to Finance Ministry figures (pdf) published this weekend. The overall deficit fell short of ministry forecasts of 7.2% of GDP at the end of the fiscal year, but is still an improvement from the 8.2% recorded in FY2018-2019. Finance Minister Mohamed Maait said last month that Egypt is on track to continue narrowing the budget deficit in FY2020-2021, and is targeting bringing down the deficit to 6.3% of GDP.

Meanwhile, the primary surplus, which strips debt service payments, narrowed to 1.8% of GDP in the fiscal year, down from 2% in FY2018-2019, and slightly missing an initial target of 1.9% of GDP.

Revenues for FY2019-20 came in lower than expected at EGP 975 bn, around EGP 200 bn below a forecast of EGP 1.2 tn. Finance Minister Mohamed Maait previously said that state revenues took a hit in the final quarter of the fiscal year. This came as the lockdown and economic disruption hit tax revenues, the suspension of flights brought the tourism sector to a standstill, and trade disruptions caused Suez Canal revenues to dip.

The collapse in oil prices was a plus as expenses came in at EGP 1.4 tn, outperforming the state’s draft budget, which had forecast a figure closer to EGP 1.6 tn. The consistent drop in oil prices guided government spending on fuel subsidies down 77% during the fiscal year, Maait previously said.

The net drop in expenses came despite pressure on state coffers from stimulus and health spending to face covid-19. The government had allocated EGP 100 bn at the onset of the pandemic to tackle emergency spending needs, of which it had doled out some EGP 65 bn by July to purchase medical supplies, staple goods, and pay employment grants for day laborers.