Egypt’s budget deficit is believed to fall this fiscal year on the back of economic reforms, World bank believes.

The budget deficit is expected to ease to 8.8% of the gross domestic product (GDP) by FY2017-18 on the back of energy subsidies reform and higher tax revenues, according to a report by the World Bank (WB).

The economy is anticipated to grow by 4.5% in FY2017-18, spurred by a resilient private consumption, yet partially weighed down by high inflation over the short term.

“Economic activity is expected to improve, and imbalances are projected to narrow further through the elimination of distortions in foreign currency markets and the government’s commitment to fiscal consolidation,” according to the report.

“The recently adopted industrial licensing law and further improvement in the regulatory framework are expected to improve the business climate and foster growth over the medium term,” the statement adds.