By Elias Al Helou

Egypt reports $17.23 billion primary budget surplus, reaching 5.87 percent of GDP from July 2023 to May 2024

This represents a significant increase compared to the previous fiscal year, when the surplus was only $2.43 billion

Egypt reduced its total budget deficit to 3.6 percent of GDP during this period, down from 6.1 percent in the prior fiscal year.

Egypt achieved in the 11-month period from July 2023 to May 2024 a primary budget surplus of EGP822 billion ($17.23 billion), equivalent to 5.87 percent of its gross domestic product (GDP). This represents a significant increase compared to the previous fiscal year, when the surplus was only EGP116 billion ($2.43 billion), or 1.15 percent of GDP, according to Minister of Finance, Mohamed Maait.

Reduced budget deficit

Additionally, Egypt reduced its total budget deficit to 3.6 percent of GDP during this period, down from 6.1 percent in the prior fiscal year. This was driven by strong revenue growth, as general government revenues reached EGP2.2 trillion, a 73.7 percent increase.

Revenue growth drivers

This was primarily due to the digitization of processes, an expanded tax base, and improved tax administration efficiency. Tax revenues alone grew by 36 percent to EGP1.4 trillion, while non-tax revenues surged 258 percent to EGP778 billion, largely due to the Ras El-Hekma deal.

Increased spending, prioritizing social sectors

On the expenditure side, total government spending increased by 43.2 percent to EGP2.7 trillion. However, key social sectors saw substantial funding increases – education spending grew by 20 percent to EGP226 billion, and health spending rose 31.9 percent to EGP156 billion. To support vulnerable populations, spending on subsidies, grants, and social benefits grew by 26 percent to EGP467 billion, while the Takaful and Karama social protection program received a 52 percent annual increase to EGP32 billion.

Reduced investment spending, pension fund dues

Despite these expansions, the government reduced investment spending funded by the treasury by 8 percent to approximately EGP179 billion, aiming to encourage greater private sector participation in driving investments. Additionally, the government paid EGP185 billion in dues to insurance and pension funds.

Debt reduction goals

Looking ahead, the Minister of Finance highlighted the medium-term goal of reducing the government’s debt service burden to 30 percent of total expenditures, with the aim of reaching a debt-to-GDP ratio of 80 percent by June 2027.

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