Minister of Finance Mohamed Maait stated that President Abdel Fattah Al-Sisi had ordered an increase in public spending to improve the living conditions of citizens, as well as the wages of state workers and pensioners, in the new draft budget for the fiscal year 2024/2025.
He said that this step aims to reduce the burdens on citizens by minimizing inflationary effects while achieving economic targets and prioritizing the health and education sectors. He also said that it aims to expand the social protection umbrella, with fair budget allocations to meet the growth and development needs of all regions and segments of society. In this context, he said that the state is keen on completing the implementation of the Decent Life initiative, the largest project in the history of Egypt, which aims to improve the lives of 60% of Egyptians who live in the countryside.
In a statement by the Ministry of Finance on Tuesday, Maait said that the government will continue to implement a package of structural reforms to support promising sectors and stimulate the competitiveness of the Egyptian economy internationally.
He added that the government is targeting fair economic growth in the next fiscal year, driven by a greater role for the private sector in economic activity, as the engine for development and economic recovery. He pointed out that the proposed program will enhance the ability to meet financing and external needs over the next two years and attract more investment flows, reducing the need for external financing.
The Minister of Finance indicated that the government will continue, during the new fiscal year, to maximize efforts to maintain macroeconomic stability and achieve positive financial indicators by deepening financial discipline policies. “We aim to record a primary surplus of no less than 2.5% of the gross domestic product annually in the medium term, and set deficit and debt rates on a downward path to create flexible fiscal spaces that can strengthen social protection programs,” he added.
Maait also highlighted the new procedures and reform measures for government debt management, which include setting a binding ceiling for annual burdens to ensure the downward path of the debt-to-GDP ratio reaches less than 85% by the end of June 2028 and extending the life of the budget agencies’ debt to four years in the medium term instead of three years. He said that the current strategy is to reduce the need for quick financing and that there is a strategy that is subject to annual updating to reduce the ratio and service of debt to the gross domestic product and continue developing the government securities market to attract more investors by diversifying financing sources.
He added that the government will also continue to maximize efforts to expand the tax base by integrating informal activities, through the optimal use of smart tax solutions and automated systems to survey the tax community more accurately and achieve tax justice with full commitment to maintaining the stability of tax policies.
