Egypt's government approved on Wednesday a draft state budget for 2016-17, targeting economic growth of 5-6 percent versus 4.4 percent in 2015-16, Planning Minister Ashraf al-Araby said.
Egypt, which relies heavily on imports, has been battling a shortage of dollars since an uprising in 2011 that drove away tourists and foreign investors, two big sources of hard currency. It devalued the pound this month, which economists said would encourage foreign investment but risks driving up inflation and hurting the poor.
Araby projected total gross domestic product of LE3.3 trillion (US$372 billion) in 2016-17 and said the government would need to attract LE530 billion pounds in investments, up 16.5 percent, to reach that goal.
The deficit is projected to reach 9.9 percent, Finance Minister Amr al-Garhy said at a news conference with Araby. He added that the deficit had expanded to 11.5 percent this year.
The government will now send the draft budget to President Abdel Fattah al-Sisi and parliament for final approval.
The government aims to reduce unemployment to 12 percent, Araby added. Unemployment stood at 12.8 percent in December.
The government had "not taken a decision until now" over making a deal with the International Monetary Fund, Araby said.
The newly appointed Garhy said the government expected LE627 billion in revenue including LE434 billion from taxes such as the new value-added tax (VAT) which is yet to be implemented.
Total revenues in the current financial year stood at LE520 billion, Garhy said. The government plans to spend LE936 billion in 2016-17 versus LE829 billion in 2015-16.
The government will spend LE210 billion on subsidies next year and LE228 billion on wages.
Prime Minister Sherif Ismail promised tough action to restore growth with a government programme aimed at reducing the deficit and protecting the poor as anger mounts over a deteriorating economy.
He said the growing population of 90 million people had strained public services, while political instability since the 2011 uprising had hit growth and foreign investment.
A number of difficult reforms have been delayed, from a VAT that would increase government revenues and a civil service law that would trim the country's public workforce, to an ambitious plan to wean the country off costly energy subsidies that have been scaled back.