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UPDATE 1-Egypt's parliament passes 2017-18 budget
July 4, 2017 / 3:41 PM / 5 months ago

UPDATE 1-Egypt's parliament passes 2017-18 budget

(Adds details, context)

CAIRO, July 4 (Reuters) - Egypt’s parliament on Tuesday passed the state budget for the 2017-18 fiscal year beginning in July, sticking with its budget deficit target of 9.1 percent amid a fiscal belt tightening by the government that is part of a broad programme of economic reforms.

The government cut fuel subsidies last week, hiking prices by up to 50 percent as part of the reforms tied to a three-year $12 billion International Monetary Fund loan agreement aimed at tightening government finances and attracting foreign investors.

The IMF is expected to disburse a second loan installment of $1.25 billion within the coming few weeks.

Egypt is struggling to revive its economy since a 2011 uprising drove away tourists and foreign investors - two major sources of foreign currency.

The 9.1 deficit target is lower than the 10.8 percent expected for the current year. It has been maintained despite a decision last month to more than double food subsidies and raise some benefits in order to ease the impact of austerity on the country’s most vulnerable.

The new budget projects economic growth of 4.6 percent, higher than the 3.8-4 percent growth expected this year.

It must now be ratified by President Abdel Fattah al-Sisi, a formality, before coming into effect. (Reporting by Nashaat Hamdy; Writing by Eric Knecht; Editing by Ahmed Aboulenein and Jane Merriman)

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