Egypt’s budget surplus in the first nine months of the current fiscal year 2023/2024 has increased significantly, reaching EGP416 billion ($8.74 billion), which is three percent of the GDP. This marks a substantial growth compared to EGP50 billion ($1.05 billion), or 0.5 percent of the GDP, in the same period of the previous fiscal year 2022/2023, according to the country’s Minister of Finance, Mohamed Maait.
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Minister Maait also mentioned that the Ras El-Hekma deal, signed between Egypt and the UAE’s ADQ in February, contributed EGP179 billion to the state’s General Treasury, equivalent to approximately 1.3 percent of Egypt’s GDP. The UAE has deposited $11 billion at the Central Bank of Egypt (CBE) for investment in the project, out of the total financing of $35 billion.
During the past nine months, total general state revenues have increased by 57.1 percent, reaching over EGP1.45 trillion compared to the corresponding period in FY2022/2023. However, if the proceeds from the Ras El-Hekma deal are excluded, the revenue growth stands at 38 percent.
Increased non-tax revenues
Minister Maait explained that non-tax revenues have surged by 122.9 percent, and tax revenues have exceeded EGP1 trillion, accounting for 41.2 percent of the GDP. These gains are attributed to digitization efforts and the expansion of the tax base, without imposing additional burdens on citizens or investors from July 2023 to March 2024, compared to FY2022/2023. Non-sovereign tax revenues grew by 32 percent, while sovereign tax revenues increased by 83 percent.
Furthermore, general state expenditures have reached EGP2.3 trillion, reflecting an annual growth rate of 50.8 percent during the past nine months. This increase is primarily due to rising interest rates and higher spending on support, social protection, and wages.
Egypt aims to reduce the debt service bill to 30 percent of general expenditures in the medium term as part of its comprehensive strategy to decrease the debt ratio by 80 percent by June 2027, according to Minister Maait.
Maintaining overall deficit rate at 5.42 percent of the GDP
Despite the significant impact of global crises and rising interest rates, the government has managed to maintain the overall deficit rate at 5.42 percent of the GDP, slightly higher than the 5.40 percent recorded during the same period last year.
Minister Maait emphasized that despite the challenges faced by the economy, the education sector has received EGP180 billion in funding during the past nine months, while the health sector has received EGP125 billion. He also highlighted a 33.9 percent increase in actual spending on support, grants, and social benefits to alleviate the inflationary burdens on low- and middle-income households.
Other dues and payments
Furthermore, the General Treasury has made due and payments, including EGP135 billion in dues to the Social Insurance and Pensions Fund, EGP69 billion for subsidized goods support, and EGP24 billion for the “Dignity and Solidarity” program. These figures represent a growth rate of 44 percent compared to the same period in the previous year.
Moreover, actual wage expenditures have increased by 74.6 percent to accommodate special social packages aimed at easing the financial burdens on state employees.
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