Egypt’s budget deficit shrank to 5.1% of GDP in the first half of FY2016-17, registering EGP 174 bn,down from 6.1% of GDP a year earlier, Finance Ministry Amr El Garhy announced at a press conference yesterday, according to a report by Al Masry Al Youm. Revenues grew to 14.5% of GDP, coming in at EGP 220 bn from EGP 192 bn last year. The government also plans to phase out fuel subsidies over the coming five years and is expected to have clear figures for energy and fuel subsidies as part of the IMF agreement, he added, Al Mal reports. On the revenue side, El Garhy expects the executive regulations of the value-added tax (VAT) law to be ready within two weeks, saying tax revenues were affected by the transition from a general sales tax to VAT as taxpayers were given an extra three months to submit their returns.

…El Garhy also announced that Egypt overshot the IMF’s target for the primary deficit, which was 20% lower, according to Al Mal. Overall, the government is targeting a budget deficit of 10.1% of GDP in FY2016-17, down from the 11.5% of GDP recorded at the end of last fiscal year, Al Shorouk says.

Sneak peek at IMF agreement: The minister lifted the veil on a corner of the IMF financing agreement, which will apparently see the state’s payroll outlay fall to 6.8% of GDP from last year’s 7.8% and tax revenue rising to 13.8% of GDP from 12.6% last year, Al Borsa reported. The IMF loan carries a 1.5-1.75% interest rate; each of the three tranches carries a separate 10-year repayment period with a 4.5-year grace period, said El Garhy. The agreement also includes commitments to restructuring fuel and energy subsidies within 3-5 years while simultaneously expanding social protection programs and low income housing, he said — both previously well-known provisions.

However much the learned folks in the House may prefer otherwise, Amr El Garhy didn’t say yesterday he is raising taxes. An AFP story created some confusion on El Face and Tweeter yesterday with a piece on the presser that opened with the lede “Egypt will make further ‘significant’ cuts to energy subsidies, raise taxes and seek more international financing…” The taxes bit also made it into online headlines. The problem: As the story makes clear, El Garhy was making reference to the 1 ppt hike in the value-added tax to 14% in July from the introductory rate of 13%. Not a new tax, folks: That’s exactly how the law was written.

Separately, El Garhy also announced the Finance Ministry will be fixing the customs USD exchange rate throughout February rather than letting the rate move freely each day. He said the rate will be set each month using the reference rate set in previous months, according to Al Borsa. Federation of Egyptian Industries chief Mohamed El Sewedy commended the decision, saying that it will help stabilize commodity prices in the local market, Al Borsa reported.