Public finance - Macro & Micro levels

1. Public finance - Macro & Micro levels Dr.Mohamed Zaky Faculty of Economics and Political Sciences Cairo University

2. General overview Public finance is concerned with role of government Producing and introducing public good and services

3. Public Finance: Institutional Point of View Structure of Egyptian Economy Private sector Public sector Non-Gov. sector Gov. sector Local Gov. Services authorities Economic authorities Central Gov. Public business sector Public sector

4. Public Finance: Economic Point of View Adam Smith “Public finance is that branch of economics which deals with the income and expenditure of a government” …

5. Public Finance: Economic Point of View GDP I C (Public+Private) (Public+Private) X • (Net Exports)

6. Public Finance Budgeting Public Expenditure Public debt Public Revenue

7. Public finance on macro level Public Expenditure Public Revenue Fiscal policy Public Debt Budgeting

8. Public finance on macro level • Coordination between fiscal and monetary policies • Inflation target and of fiscal policy • Independence of central bank • Contractionary and expansionary fiscal policy The most important subjects:

9. Budget input & output

10. Budget input & output

11. Expenditures according to functional classification (Millions)

12. Budget balances2010/2011

13. Budget balances Total Revenues Total Expenditure Interest payments - - = Primary Deficit Operation Deficit Cash Deficit = = Total Revenues Total Expenses - Total Revenues with Revenues available to Finance Investment Total Expenses without Investment. -

14. Budget balances Net proceeds from Privatization Net borrowing + Overall Deficit Overall Deficit = = Net Acquisition of Financial Assets. Cash deficit +

15. Thank you! Dr.Mohamed Zaky