Egypt’s cabinet has approved the 2024-2025 budget amounting to EGP6.4 trillion ($135.74 billion). The approval comes amidst pressing economic challenges, including a significant shortage of foreign currency, large budget deficits, and a strained balance of payments. Notably, Egypt allocated EGP636 billion to support social programs and committed to its goal of curbing public spending to reduce debt.
Egypt’s allocation of EGP636 billion to social support in its budget underscores the government’s commitment to supporting vulnerable segments of society. Particularly, EGP144 billion will go to the food subsidy program, benefiting nearly 60 million Egyptians. Additionally, EGP154 billion will go to petroleum product subsidies, aiming to alleviate the burden of high energy costs on citizens.
Public investment cap approved
In a bid to tackle Egypt’s mounting debt, the cabinet announced intentions to curb public spending. For the first time, Egypt set a cap of EGP1 trillion for public investment spending in the upcoming fiscal year during its budget meeting. This measure is part of a broader strategy to gradually reduce the debt-to-GDP ratio, with a target of reaching 80 percent by 2027. Furthermore, the cabinet revealed that 50 percent of revenues Egypt generates from selling state assets would directly go to reducing government debt.
Moreover, Egypt set a target in 2022 to raise $10 billion annually over the span of 4 years through private investment in state assets.
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Economic growth targets
Amidst the fiscal consolidation measures, Egypt remains optimistic about its economic prospects. Hence, Egypt is targeting a preliminary GDP surplus of 3.5 percent in its budget and expects revenues of EGP 5.05 trillion
Hala al-Said, minister of planning and economic development, announced that the government also aims for a growth rate of 4.2 percent in the upcoming fiscal year, signaling confidence in the nation’s economic resilience. Meanwhile, Mohamed Maait, minister of finance, added that the recent $8 billion IMF agreement, alongside expectations of over $20 billion in foreign currency inflows, will alleviate the ongoing currency shortage and support Egypt’s budget targets. Moreover, they will provide a much-needed boost to Egypt’s financial stability.
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