Egypt's fiscal deficit to narrow to 6.4pc in FY 2019-20

Egypt's fiscal deficit will shrink to 6.4 per cent of GDP in 2019-20 fiscal year (FY) from 9.4 per cent in FY 2017-18, said a report by the official news agency MENA.

The fiscal deficit is expected to be 7.8 per cent of GDP in FY 2018-19, said the report release by economic agency Fitch Solutions.

"Egypt's fiscal deficit will continue to shrink in the coming years as robust economic growth and fiscal reforms bolster revenues and help to temper expenditure growth," said the report.

Egypt has already implemented significant fiscal reforms in recent years, according to Xinhua.

"As a result, we believe that Egypt recorded a primary surplus of 0.2 per cent of GDP in FY2017-18, the first time the country has run a primary surplus since FY 2003-04," the report said.

Fitch Solutions expected Egypt's primary surplus to rise to 2.1 per cent of GDP in FY2018-19 and 2.3 per cent of GDP in FY 2019-20.

It forecasts total public debt to fall from an estimated 89.4 per cent of GDP in FY 2017-18 to 84.3 per cent in FY 2018-19 and 78.6 per cent of GDP in FY 2019-20, due to the country's fiscal consolidation and robust economic growth.

Over years of instability due to turmoil, Egypt has suffered economic recession.

It started a strict three-year economic reform program based on austerity measures including fuel and energy subsidy cuts and tax hikes in 2016.

The IMF supported Egypt's economic reform plan with a 12-billion-dollar loan, two thirds of which has already been delivered.