What we’re tracking on 02 July 2018
Welcome to FY2018-19: We are now officially in the state’s FY2018-19 fiscal year, and the Finance Ministry has welcomed the start of the new year with its customary statement. This year’s budget projects GDP growing at 5.8%, with spending reaching a record EGP 1.4 tn. It also targets a deficit of 8.4% of GDP and a primary deficit surplus of 2%. Finance Minister Mohamed Maait played up the social spending aspect of the new budget, noting that outlays for education and healthcare will reach EGP 257.7 bn, up almost 16% from EGP 222 bn in FY2017-18. Spending on commodity subsidies will ring in at about EGP 86.2 bn. The government has already cut fuel, electricity, water and metro ticket subsidies over the past few months — and has telegraphed that another wave of subsidy cuts is coming later this budget year. President Abdel Fattah El Sisi has yet to ratify the FY2018-19 budget, which passed the House of Representatives nearly a month ago. You can read our refresher here.
LEGISLATION WATCH- The House Budget Committee will begin debate of amendments to the Customs Act today, Al Mal reports. The draft law, which received Cabinet sign-off in February, is expected to slash custom duties on capital goods to 2% from a current 5% and expand temporary exemptions for production inputs and packaging equipment. The law also includes provisions designed to curb customs evasion. The latest draft also includes measures designed to facilitate the flow of goods through Egypt’s ports, including establishing a “white list” of importers eligible to benefit from expedited clearance of goods, sources had told us previously.
The Madbouly Cabinet will present its policy program to the House of Representatives tomorrow, Al Mal reports. Among its priorities: the war against terror, pressing ahead with its economic reform agenda, expanding social programs and shoring up the social safety net, improving the quality of education and healthcare, and maintaining “balanced” foreign relations, Ahram Gate reports. The program will then be the subject of debate at a plenary session of the House on 9 July, sources tell the newspaper.
Shuffle of governors expected this week? Prime Minister Mostafa Madbouly sent his list of candidates to the president for review last week. Government sources said at the time the shuffle would be announced last week, suggesting that as many as 15 of 27 governorates could be run by new faces.