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Sunday, 23 September 2018

It looks like we’re not quite going to make our deficit target

**#2 EXCLUSIVE- It looks like we’re not quite going to make our deficit target: The Finance Ministry is planning to amend the FY2018-19 budget deficit target at the end of the month on projections that we may — just barely — miss it, a government source told Enterprise. The deficit for the year is projected to fall to 8.6% of GDP, but the initial estimate was for a decline to 8.4%, the source said. The source blamed rising US interest rates and a spike in oil prices this year for the amended targets. Initial budget projections had assumed an oil price of USD 65/bbl. Oil prices have been hovering in the USD 80 neighborhood since the summer, prompting the Madbouly government to look into hedging strategies.

You had best be paying your taxes: The source said the ministry’s strategy to keep the budget on target this time will be to “ensure the state gets what it is owed” in addition to the state privatization program. The change in the deficit target is expected to be officially announced once the government releases macro indicators for 1Q2018-19, the official said.

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