Arab Today, arab today egypts fuel price hikes are positive for credit profile
Last Updated : GMT 02:38:59
Arab Today, arab today
Arab Today, arab today

Tackling subsidies is a way of reducing budget deficit

Egypt's fuel price hikes are positive for credit profile

Arab Today, arab today

Arab Today, arab today Egypt's fuel price hikes are positive for credit profile

Fitch Ratings
Cairo - Arab Today

Fitch Ratings said Tuesday the recently announced fuel price hikes are an important step toward reducing subsidies that contribute to Egypt's substantial fiscal deficit - a key rating weakness.
Tackling subsidies is a key way of reducing Egypt's budget deficit, which we estimate at 12.1% of GDP in 2013/14 (to end June).
A double-digit fiscal deficit in each of the last three years has pushed government debt to over 90% of GDP from 76.6% at end-FY11 and contributed to a series of downgrades to Egypt's ratings.
The subsidy bill, which is dominated by fuel products, accounted for about one-third of total spending in FY13, or 12% of GDP.
The price hikes, which range between 40%-78% for petrol and 175% for natural gas, follow the adoption of a tighter budget on June 29.
The 2014/15 budget targets a deficit of 10% of GDP, down from the draft budget's 12.2% after President Abdul Fattah al-Sisi's intervention resulted in a 1% of GDP cut in budgeted subsidy spending and a 1.5% of GDP rise in budgeted tax revenues.
Subsidy spending is to be held at the FY13 level and tax revenues are budgeted to rise by 26%. Several new revenue-raising measures have been introduced, including a capital gains tax, Fitch said.
The budget maintains a conservative assumption for grants. Only pledged grants that have yet to be drawn are included in the budget, totalling EGP 23 bn, compared to an official estimate of EGP 117 bn for FY13.
Fitch assumes that support, primarily from Kuwait, Saudi Arabia and UAE, will remain forthcoming and anticipates grants to be well above the budgeted level.
"Concerns about political stability have prevented previous administrations from tackling the cost of subsidies".
"Now, the political environment is more conducive to fiscal consolidation. Only isolated protests in response to the price hikes were reported. However, serious political tensions remain and the expected return of inflation to double-digits (from 8.2% in May) may cause social strains", it added.
Fitch reaffirmed its 'B-' long-term foreign currency rating for Egypt on June 27, noting that "material progress on fiscal consolidation" was one factor that could lead to a positive rating action.
Source: MENA

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today egypts fuel price hikes are positive for credit profile Arab Today, arab today egypts fuel price hikes are positive for credit profile

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today egypts fuel price hikes are positive for credit profile Arab Today, arab today egypts fuel price hikes are positive for credit profile

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Israeli court convicts Palestinians of 2016

GMT 04:39 2017 Tuesday ,17 October

Israeli court convicts Palestinians of 2016
Arab Today, arab today Iran's Facebook shuts down

GMT 23:50 2017 Monday ,16 October

Iran's Facebook shuts down
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Anoshka happy for reactions to her talk show

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show
Arab Today, arab today India to close colonial-era military farms

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:55 2017 Thursday ,12 October

Safaa Sultan happy for “Love School”

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 12:02 2017 Saturday ,14 October

Conservation cutbacks put Brazil's

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 12:25 2017 Saturday ,14 October

Squeeze on UK health gives advanced

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday