President Abdel Fattah Sisi said he was not happy with the projected deficit in the new draft budget for the 2014/2015 fiscal year.
The Cabinet is sending the draft budget to Sisi for approval soon.
During a graduation ceremony for six new batches of armed forces officers, Sisi said that Egypt is facing economic and security challenges.
"We can not adopt the draft budget deficit this year, which amounts to LE2 trillion," he added. "We need urgent action to reform the economic system."
Sisi added that he would take only half his salary and would give up half of his wealth to the state. He pointed out that the maximum wage rate will be implemented on everyone.
The draft budget includes a raise in pensions for civilians and military personnel.
Public spending is LE807 billion, an increase of LE65 billion from the previous budget. Revenues are LE517 billion, which is less than the previous budget.
Grants and foreign aid stands at US$20 billion.
Meanwhile, the deficit is LE288 billion or 12 percent of GDP, taking into account a decline in foreign grants and increased spending on health, education, scientific research and minimum wage, which would require rationalizing energy subsidies and applying tax reforms.
Reforming the petroleum products subsidies would save LE40 billion, while LE117 billion were allocated to social programs, an 20-percent increase.
Another 33 percent in insurance funds and pensions and an 11-percent increase in consumer commodities ration cards are also proposed.
In addition, LE9.5 billion were allocated for social housing projects and LE12 billion to accommodate three million households in the pensions program.
Edited translation from Al-Masry Al-Youm
