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Egypt sees 3.8 percent growth in fiscal year from July
April 23, 2013 / 2:52 PM / 5 years ago

Egypt sees 3.8 percent growth in fiscal year from July

CAIRO (Reuters) - Egypt said its economy will grow by 3.8 percent in the fiscal year starting in July as ministers outlined the 2013/14 budget to parliament on Tuesday.

A views shows newly constructed residential buildings in El Maraj city at New Maadi, south of Cairo March 30, 2013. REUTERS/Amr Abdallah Dalsh

The forecast delivered by Planning Minister Ashraf Al-Araby to the upper house of parliament was slightly below his most recent prediction of 4 percent growth next year but well above the 2.5 percent the government expects in 2012/13.

Finance Minister Al-Mursi Al-Sayed Hegazy detailed proposed tax increases and spending cuts, including plans to save 36.3 billion Egyptian pounds ($5.25 billion) by rationing the distribution of subsidised fuel using smart cards.

The measures were broadly in line with commitments made to the International Monetary Fund in negotiations which have yet to conclude on a $4.8 billion loan to help ease Egypt’s deep economic crisis.

Subsidised petrol would be sold only to smart card holders from July 1, Hegazy said, but he gave no date for the start of rationing of more widely used diesel fuel, saying it too would eventually be sold via smart cards, except for agriculture and food industries.

Subsidised butane gas, widely used for cooking and home heating, would be distributed by ration coupons only to needy families, completing a reform already under way.

The measures aim not only to cut an unsustainable subsidy bill but also to combat widespread smuggling of subsidised fuel. He did not mention any change in subsidies on food.

Hegazy said tourists visiting Egypt would be charged an additional $10 fee from November on top of the $15 visa fee paid by all foreign visitors.

Tourism has slumped due to political turmoil since the 2011 uprising that overthrew former President Hosni Mubarak.

The general sales tax would evolve into a value added tax by the start of 2014, widening the tax base to include all services except social services such as healthcare and education, the minister said.

Reporting by Maggie Fick and Shaimaa Fayed; Writing by Paul Taylor; Editing by Ruth Pitchford

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