Egypt spends more than it generates in revenues, relying heavily on tourism and Suez Canal income for foreign currency. Before 2011, tourism accounted for $27.5 billion of Egypt’s economy, or 11 per cent of it. The Suez Canal annual income exceeds $5 billion. Egypt’s revenue collection was $45.57 billion in 2013 according to the CIA Fact Book, and also takes into account remittances by Egyptians working abroad, foreign aid, and tax income. Expenditure in 2013 amounted to $80.42 billion, implying a fiscal deficit of 13.54 per cent of GDP. This was 5.7 per cent of GDP in 2004. A fiscal deficit, in Keynesian terms, is supposedly good as it implies higher government spending that can eventually get countries out of recessions. For Egypt, this is not the case. Subsidies are a third of government spending, and the remainder goes for spending on education, health care, etc, in addition to interest payments made on its public debt that stood at 92.2 per cent of its GDP in 2013.
Posted on: Thu, 01 May 2014 03:37:30 +0000
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