Egypt's President Abdel Fattah al-Sisi approved the 2016-17 draft budget on 31 March, as well as an economic development plan, and sent both to Parliament for passage, state news agency MENA said. The draft budget reduces the deficit for FY2016/17 to 9.8% of GDP from the current 11.5%, and the development plan targets a growth rate of 5.2% versus 4.4% now, MENA said. Egypt's government had on Wednesday approved a draft with a deficit of 9.9% and economic growth of 5-6% and passed it to the President for amendments. The draft budget aims to reduce unemployment to below 12% from its current level of roughly 12.8%, MENA said.   Our comment: The approved budget is yet to be subject to discussion in Parliament; hence, is not yet a final document. The draft carries two key developments, namely the introduction of the value-added tax, which is set to boost revenues by around 1% of GDP. In addition, the government budgeted for a mere 4% Y-o-Y growth in the wage bill, alleviating pressure on the budget. Investments were set for an all-time high nominal growth of c40% Y-o-Y at EGP107 billion. Our fiscal deficit forecast for FY2016/17 stands at 11.2% of GDP, taking into account slower GDP growth of 4.1% and less than a full-year impact of the VAT. We will be looking into revising our numbers once more details are published. (Mohamed Abu Basha)