Subsidy cuts in the air for mid-2018 as Finance Ministry prepares to draw up its FY2018-19 budget: The Finance Ministry released its general guidelines (pdf) to government ministries for drafting the FY2018-19 budget last week. The ministry is targeting GDP growth of 5.5% for the fiscal year and will look to cut the budget deficit to 8.5% of GDP, down from 9.5% projected in FY2017-18. The budget is also targeting reducing public debt to 94% of GDP, and cutting unemployment to 10-11%.

These targets would be achieved by staying the course on reform measures, including through continued subsidy reforms, efficient management of the tax system, and reforming the welfare and pensions system.

The ministry hints at further subsidy cuts to come next fiscal year: The ministry strongly implied that energy subsidy reform will be cut again during FY2018-19. Both Finance Minister Amr El Garhy and Oil Minister Tarek El Molla had said that it would be unlikely that the government will begin another round of subsidy cuts this fiscal year. El Garhy then later stated that it would review the status on subsidy cuts as rising crude energy prices threaten to add pressure to the budget deficit.