Egypt projects borrowing needs will climb 7.1% in 2021/22

A view of the city skyline and River Nile from Cairo tower building in the capital of Cairo
A view of the city skyline and River Nile from Cairo tower building in the capital of Cairo, Egypt December 5, 2019. REUTERS/Amr Abdallah Dalsh/File Photo

CAIRO, April 25 (Reuters) - Egypt expects its borrowing needs to rise by 7.1% to 1.068 trillion Egyptian pounds ($68.1 billion) in the financial year that will begin in July, according to a copy of the draft budget.

The government projected raising 66 billion pounds of this by selling international bonds, down from 72 billion pounds this year, said the draft seen by Reuters.

Total expenditure for 2021/22 is set at 1.84 trillion pounds in the draft, and revenue at 1.11 trillion pounds. The budget was based on economic growth forecast at 5.4% - up from an estimated 2.8% this year - and inflation of 7%, Finance Minister Mohamed Maait told parliament.

Overall government revenues, including all state-owned enterprises and other bodies not in the general budget, was forecast to amount to 2.46 trillion pounds, Maait said.

The budget forecast an overall deficit equivalent to 6.7% of gross domestic product, down from 7.7% this year, and a primary surplus of 1.5%.

"If they are able to achieve that, it would be very positive," said Allen Sandeep of Naeem Brokerage.

The government projected its fuel subsidy bill would drop by 35% to 18.4 billion pounds and its tax revenues would increase by 1.9% to 983 billion pounds.

Often the world's largest wheat buyer, Egypt also projected it would provide 8.6 million tonnes of the grain to the public, of which it planned to import 5.1 million tonnes.

The draft budget projects an average interest rate of 13.2% on domestic treasury bills and bonds, down from 14% this year.

($1 = 15.7000 Egyptian pounds)

Reporting by Nashat Hamdy Writing by Aidan Lewis Editing by Nadine Awadalla

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