It stated that the public revenues grew 45% year-on-year (y-o-y) in Q1 2017. “The wages grew 11%, but contracted in real terms in the high inflation environment. Debt servicing added the most to expenditure growth, increasing 54% y-o-y to make up 40% of public expenditure with interest rates up over 400bps in that period. “With spending almost 50% higher than revenues, the structural imbalance will be hard to remedy,” says the report. HSBC noted that reform implementation is key, but the broader challenge is to leverage the high inflation environment to grow public revenues “while keeping spending growth under control.”

Source: Daily News Egypt May 29, 2017 17:15 UTC