Two takes on this year’s budget

President Abdel Fattah al-Sisi officially ratified the budget for fiscal year 2015/16 last week after the Cabinet reduced the projected deficit to 8.9 percent of gross domestic product (GDP), or around LE251 billion.

The target deficit is 2 percent lower than the fiscal year ending June, with a GDP growth rate set at 5 percent.

Sisi had sent the first draft of the budget back to the Cabinet asking for a reduced deficit target. As it stands now, the state is aiming for a 2 percent lower deficit than last fiscal year, on the back of a 27.7 percent increase in overall revenue.

Some have called the budget austerity-driven, while others have said that the targets are not feasible.

Mada Masr spoke to two analysts to get their views on the budget and the targets set by the state: Wael Ziada, head of research at regional investment bank EFG-Hermes, and Amr Adly, an economic researcher at the Carnegie Center for Middle East Studies.

Ziada says the budget calls for fiscal consolidation, not austerity. He adds that while the deficit may be achievable, the bigger challenge may be in meeting the target for GDP growth. Read more about his analysis here.

Adly, on the other hand, says that the state’s target of decreasing the deficit by 2 percent over the last fiscal year is unrealistic. Read his take here.