Finance Min.: Gov't Succeeded in Controlling Budget Items with Exception of Interest Expense

The Egyptian Ministry of Finance said that it succeeded in controlling all items of the general budget, except for the interest expense item, during the current and next fiscal year.

Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any borrowings—bonds, loans, convertible debt or lines of credit.

The Ministry of Finance attributed debt interest out of control during the aforementioned years to a package of factors, which included inflationary pressures, interest hikes globally and locally in the first place, in addition to the decline in the local currency exchange rate against the dollar, and the consequent increase in the volume of debt, according to the financial statement of the new budget.

The expense of interest on debt in the budget for the next fiscal year 2023/24 will amount to EGP 1.120 trillion or 9.5% of GDP, and EGP 775.150 billion in the budget for the current fiscal year, or 8.5% of GDP.

Debt interest payable accounted for 37.4% of total budget expenditures for the next fiscal year, amounting to EGP 2.990 trillion, compared to 34.7% of expenditures for the current fiscal year.

The interest expense on t-bills, and on public treasury bonds acquire the largest share of interest at a value of EGP 437.2 billion, EGP 346 billion, respectively, followed by interest on external public debt at a value of EGP 152.25 billion, then central bank bonds at a value of EGP 134.2 billion.

Moreover, the interest expense of temporary coverage of the debit balance amounted to EGP 33.25 billion, and external interest paid by the authorities amounted to EGP 362 million, and various other benefits amounted to EGP 15.7 billion.