Finance Minister Mohamed Maait engaged in a candid dialogue with media representatives and journalists about the forthcoming fiscal year 2024/25 budget. He emphasized the importance of collaborative decision-making to benefit the nation during Egypt’s new phase.
The session included Karam Gabr, Chairperson of Supreme Council for Media Regulation; Abdel Sadek Elshorbagy, Chairperson of National Press Authority; Khaled Elbalshy, Chairperson of Egyptian Journalists Syndicate; and leaders from various national and private media organisations.
Minister Maait reiterated the government’s commitment to economic stability through robust reforms. The focus is on curbing inflation with effective policies to boost growth, particularly through private sector dynamism.
He highlighted the economy’s positive response to these measures, especially in industrial, agricultural, production, and export domains. The government has continued initiatives to bolster economic recovery, allocating EGP 23bn in the new budget to enhance exports and encourage investor expansion.
Maait noted the steady improvement in economic conditions, with ongoing adjustments to ensure resilience against domestic and global uncertainties. He mentioned the daily increase in goods release rates, which bolsters supply in local markets, with released goods valued at over $14.5bn since 1 January.
The minister projected foreign cash inflows to exceed $20bn following the IMF agreement, with additional support from financial and development partners. The EU’s €7.4bn financial package further solidifies economic stability, mirrored by credit rating agencies’ optimistic forecasts, including Moody’s.
President Abdel Fattah Al-Sisi’s directives for the new budget were centered on prioritizing human development.
Maait assured continued government support to enhance living standards, balancing economic recovery, fiscal prudence, and gradual relief from inflationary pressures. This extends the state’s commitment to sharing the burden of economic adversities and the lingering impacts of the COVID-19 pandemic, regional political turmoil, and the European conflict. Like many nations, Egypt continues to navigate the economic aftermath of the pandemic and global inflation.
The minister emphasised that health and education are a “presidential priority” to complete the strategy of building the Egyptian individual during the upcoming budgets, starting from the budget of the fiscal year 2024/2025 while working on securing a strategic reserve of goods to meet the basic needs of citizens.
This includes increasing spending on social protection to alleviate burdens on middle and low-income citizens, with EGP 596bn allocated for support, including over EGP 134bn for subsidised goods and over EGP 147bn to support petroleum products due to the global rise in oil prices and the impact of exchange rate fluctuations, which poses a significant challenge to the state’s public finances. Additionally, more than EGP 40bn were allocated for the Takaful and Karama programme, noting that the bread subsidy exceeds EGP 125bn after expectations of its cost exceeding EGP 1.25 and the citizen pays EGP 0.05 while the treasury bears the difference.
The minister stated that the total public expenditure for the new budget amounts to EGP 3.9trn, while the expected revenues reach EGP 2.6trn, targeting EGP 2trn in tax revenues without adding any new burdens on citizens or investors, through maximizing efforts to integrate the informal economy with optimal utilisation of available tax systems.
The minister pointed out that restructuring the public finance complements efforts to correct the economic path, as introducing the concept of the government’s general budget helps in developing Egypt’s economic position by showing the true capabilities of the state’s public finance according to an objective reading reflecting the full revenues and expenditures of the state and its public entities.
The presentation of the “Government General Budget” will start in the fiscal year 2024/2025, including the general budget of the state and the budgets of 40 economic entities, and within 5 years, it will include all public entities of the state, so that it encompasses the general budget of the state and the budgets of 59 economic entities: revenues and expenditures, reflecting an improvement in financial performance indicators as they will be calculated according to the revenues and expenditures of the entire government general budget, including economic entities, rather than being limited as before to the general budget of the state only without economic entities.
The minister explained that during the new budget project, we left a large space for public investments in the state for the private sector to strongly emerge. We have set a ceiling for public investments for all state bodies, without exception, not exceeding one trillion pounds during the fiscal year 2024/2025, including all investment projects for public budget entities, state-owned companies, economic entities, and other state-owned entities.
The minister added that we are working on very ambitious targets, foremost among which is recording the largest primary surplus by 3.5%, and reducing the total deficit in the medium term to 6% of GDP.
He pointed out that there is a new strategy for public debt to ensure its sustainable downward trajectory, where an annual ceiling will be set for the debt of budget entities and economic entities, which cannot be exceeded except with the approval of the President, the Cabinet, and the House of Representatives, and setting a ceiling for guarantees during the next year to limit external debt, directing the first tranche surplus and half of the revenues from “privatizations” to start reducing government debt and its service burdens, and increasing the value of what is allocated to the treasury from profits distributions from all companies and entities of the state. We aim to decrease the debt-to-GDP ratio to less than 80% over the next three years.
