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CAIRO (AP) — Egypt's parliament approved a draft budget on Wednesday projecting 5.2 percent growth for the coming year and a slightly lower deficit, despite a lingering economic crisis and a downturn in the vital tourism sector.
The 2016-2017 budget anticipates a deficit of 9.8 percent, compared to 11 percent this year.
Egypt's economy is still struggling to recover from years of unrest since the 2011 uprising, and the bombing of a Russian passenger plane over the Sinai last year dealt a major blow to Red Sea tourism. Annual inflation hit 12.23 percent in May, the highest level in seven years, and has driven up the price of local goods.
As the parliament was voting on the new budget, the Central Bank banned the use of debit cards for Egyptian pound accounts abroad, a move aimed at shoring up dwindling foreign currency reserves.
A bloc of 40 lawmakers in the 596-seat parliament rejected the budget, saying it was unrealistic and that the government had gone too far in cutting fuel subsidies and spending on health and education. The legislature is packed with supporters of President Abdel-Fattah el-Sissi and has largely served as a rubber stamp for his policies.
On Sunday, Finance Minister Amr el-Garhy was quoted by Egypt's state news agency as telling lawmakers that the economic situation is "very dangerous," with the public debt now equal to 100 percent of GDP.
El-Sissi, who led the military ouster of an elected Islamist president three years ago, has sharply cut fuel subsidies and says more austerity measures are needed.
Egypt's military spending is not subject to parliamentary or public oversight.
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