CAIRO — Egypt's ambitious 2018-19 proposed budget aims to achieve a gross domestic product (GDP) growth rate of 5.8%, the highest in 10 years. The budget bill also seeks to reduce the total deficit to 8.4% of GDP, compared with 12.5% in 2015-16. It is also designed to increase state revenues by 22% and reduce the debt-to-GDP ratio to 91%.

The Egyptian government referred the public budget bill — at 1.412 trillion Egyptian pounds ($80 billion) — to parliament March 29, according to a press statement. In the bill, the government commits to increasing investment allocations to $8.4 billion in a bid to improve infrastructure and basic services. In addition, the budget calls for maintaining subsidies and social protection programs valued at $18.4 billion.

Despite the Egyptian economy’s positive steps toward recovery since the government implemented its economic reform program in 2014, three main challenges remain: the increasing internal and external public debt, which stands at 105.9% of GDP; the increasing budget deficit, which equals 10% of GDP; and the failure to reach the 5.3% growth rate set in the 2017-18 budget, when population growth was estimated at 2.5% of GDP.

"The government is making an effort to impose fiscal controls so as to reduce public debt, get rid of the interest resulting therefrom, achieve a primary surplus and reduce the budget deficit," Mohammed Muit, the deputy minister of finance for public treasury affairs, told Al-Monitor.