The Finance Ministry has submitted a draft budget to the cabinet that would increase spending by 15 percent in the year beginning on 1 July, state-run Al-Ahram newspaper reported on Wednesday.
Once approved by the army-appointed cabinet, the budget will be sent to the country's newly-elected Parliament, where it is likely to face heated debate. Parliament, dominated by the Muslim Brotherhood's Freedom and Justice Party, last month overwhelmingly rejected a cabinet plan to cut state spending.
The army is due to hand over power to a civilian president sometime before the new budget takes effect on 1 July.
Under the draft budget, spending would be LE516 billion and the deficit LE170 billion.
In March, the finance minister put the deficit for the current year at LE144 billion. Many economists believe the political and economic turmoil since last year's uprising, which has eaten into revenue and increased demands for higher wages, could end up pushing the deficit much higher.
Egypt has asked to borrow US$3.2 billion from the International Monetary Fund to help it plug next year's deficit, but the IMF is insisting the government put together a program that reins in spending or comes up with new sources of revenue.
When it announced the 2011/12 budget last June, the government had put spending at LE490.6 billion, up 14.7 percent from the previous year.
Prime Minister Kamal al-Ganzouri told a news conference on Wednesday that in the five months since it was appointed, his government had shaved spending by LE25 billion in the current budget.
The draft 2012/13 budget allocates LE126 billion for wages, LE25 billion for health and LE60 billion for education, Al-Ahram quoted Finance Minister Momtaz al-Saeed as saying.
