Egypt’s draft budget for the fiscal year (FY) 2024/25 outlines ambitious economic targets, with a projected GDP growth of 4% and a commitment to reducing the budget deficit.
Finance Minister Mohamed Maait presented the budget to Egypt’s President Abdel Fattah Al-Sisi on Tuesday. It forecasts a primary surplus of 3.5% and a medium-term goal of bringing the overall deficit down to 6% of GDP.
The budget reflects a focus on both economic growth and social well-being. Total revenues are expected to climb 36% to EGP 2.9 trillion ($60.64bn), while expenditures will rise 29% to EGP 3.9 trillion ($81.56bn).
Prioritizing People and Infrastructure
In line with President Al-Sisi’s directive, the budget prioritizes human development. The health and education sectors will receive a significant boost, with a 30% increase in their allocations.
The budget also earmarks EGP 575bn for wages, EGP 636bn ($13.30bn) for subsidies and social benefits, and EGP 40bn ($0.84bn) for the “Takaful and Karama” social support program.
For the first time, the budget incorporates the concept of a general government budget, providing a more comprehensive picture of the state’s finances. This broader framework shows total revenues reaching EGP 4 trillion ($83.65bn) and total expenditures reaching EGP 4.9 trillion ($102.47bn).
Easing the Burden and Securing Investment
Recognizing the challenges faced by low- and middle-income families, the government has allocated EGP 596bn ($12.66bn) for subsidies in the next budget. Additionally, the target for petroleum subsidies in the current fiscal year has been raised by 9% to EGP 130bn ($2.72bn).
Egypt’s commitment to economic reform is further evidenced by its agreement with the International Monetary Fund (IMF) to increase the value of its financing program from $3bn to $8bn.
The budget announcement comes on the heels of a major investment deal with the Abu Dhabi-based holding company ADQ. This $24bn agreement grants ADQ the rights to develop the Ras Al Hikma project. Additionally, the deal includes $11bn in deposits that will be used to invest in other significant projects across Egypt.
The draft budget offers a glimpse into Egypt’s economic roadmap for the coming year.
