EXCLUSIVE- FinMin’s draft FY2019-20 state budget sees spending at EGP 1.5 tn: The draft FY2019-20 state budget forecasts government spending at EGP 1.5 tn, a senior government official tells us. Public wages will account for EGP 294.9 bn of total spending, up from EGP 266 bn in the current fiscal year, which ends in June. On the flipside, the Finance Ministry expects spending on subsidies and social benefits to drop to EGP 312 bn, from EGP 332 bn on the back of subsidy cuts and the fuel pricing mechanism for 95 octane fuel that is expected to come into effect in April. Other highlights of the draft budget include:

• A budget deficit of 7% of GDP, or EGP 380-390 bn, down from 8.4% in the current fiscal year;
• Revenues rising to EGP 1.1 tn, up from EGP 989 bn in the current fiscal year, on the back of tax revenues rising to a projected EGP 863 bn from EGP 770 bn this year;
• Investments in health, education, and housing will clock in at around EGP 150 bn;
• Debt service dropping to EGP 502 bn, down from EGP 541 bn currently, as the ministry begins implementing its debt control strategy;
• A primary budget surplus of EGP 122 bn.

The Finance Ministry expects GDP growth accelerate to 6.2% in FY2019-20, it said earlier this week in its mid-year review of the FY2018-19 budget. The ministry also said it expects the average price of a barrel of oil to come in at USD 67 in FY2019-20.