Egypt's state budget deficit has decreased to 1.6% GDP in 2M18/19 (Jul-Aug), compared to 1.7% in the same period last year, according to the Ministry of Finance's monthly report. Overall revenues grew 35% Y-o-Y to EGP101bn, thanks to 50% Y-o-Y growth in tax revenues, on the back of strong growth in both income and sales tax revenues. Meanwhile, expenditure grew 24% Y-o-Y to EGP184bn, thanks to strong growth in wages (24% Y-o-Y) and interest payments (45% Y-o-Y). The overall deficit grew 12.5% Y-o-Y in nominal terms to EGP84bn, while the primary balance recorded a surplus of EGP2bn (0.04% of GDP) vs a deficit of 0.3% of GDP in the same period last year. We note that the figures at this early stage in the year are not quite representative of the fiscal dynamics, as they do not yet include revenues from the national oil company, nor do they include fuel subsidies, with both happening through settlements between the finance and petroleum ministries on a quarterly basis.