Finance Minister Ahmed Kouchouk announced that public revenues in Egypt’s draft budget for fiscal year 2025/2026 are expected to grow by 23% to reach EGP 3.1trn, while total public spending is projected to increase by 19.2% to EGP 4.6trn.
Kouchouk described the upcoming budget as one of growth, stability, and partnership with the business community, noting that the government aims to collect EGP 2.6trn in tax revenues without introducing any new burdens on citizens or businesses. Instead, the government will rely on activating tax facilitation laws and implementing reforms in customs and real estate systems, with a focus on simplification, digitisation, and expanding the tax base to attract new taxpayers.
He added that Egypt is working to gradually increase the tax-to-GDP ratio to 13% in the upcoming fiscal year—the highest level in a decade.
The budget also targets a primary surplus of EGP 807bn, equivalent to 4% of GDP, and aims to reduce the overall budget deficit to 7.3% of GDP by the end of June 2026. Kouchouk highlighted that the budget will be developed and executed using a performance-based approach to better link public expenditure with service quality.
He noted that Egypt’s financial and economic performance has markedly improved over the past nine months, reflecting more favorable macroeconomic conditions and renewed confidence among business partners and taxpayers. A record primary surplus of EGP 435bn—equivalent to 2.5% of GDP—was achieved, despite significant challenges including a EGP 110bn drop in Suez Canal revenues and EGP 150bn in additional energy sector support.
Revenue Growth and Spending Plans
From July to March, public revenues grew by 32%, while expenditures rose by 24%. Tax revenues reached a record EGP 1.4trn, reflecting a 38% year-on-year increase, again achieved without imposing new taxes. Kouchouk emphasized that the growth was driven by measures aimed at simplification, digitisation, and closer cooperation with the private sector.
He underlined continued efforts to improve the investment climate and build trust with taxpayers, citing tax and customs reforms. Meanwhile, the expenditure-to-GDP ratio remained stable, and the budget deficit declined to 6.3% of GDP during the same period.
Net foreign reserves reached $47.7bn, and inflation dropped significantly—from 33.3% in March 2024 to 13.6% in March 2025.
Kouchouk also highlighted a notable rise in private sector activity, which accounted for 59% of total investments during the first half of FY2024/2025, with an annual growth rate of 80%. Key sectors saw strong performances, including tourism (13.1%), non-oil manufacturing (12.4%), and communications and IT (15.1%).
On the social front, the government increased spending across essential services. Over the past nine months, healthcare spending rose by 27%, and education expenditure increased by 23%. The state allocated EGP 95bn for subsidised food items (a 37% annual rise), EGP 30bn for the “Takaful and Karama” social support programme (up 24%), EGP 11bn for treatment at the state’s expense (up 35%), EGP 8bn to support industrial production (up 128%), and EGP 7bn to boost exports (a 78% increase).
Debt Management and Investor Confidence
Kouchouk noted that external debt owed by budgetary entities declined by $1bn over the past eight months. Renewed foreign investor confidence has allowed Egypt to extend its debt maturity profile, reaching an average of 1.8 years by December 2024.
Kouchouk affirmed that the FY2025/2026 draft budget aims to further reduce Egypt’s public debt-to-GDP ratio to 81% by the end of June 2026. He also noted the government’s continued commitment to gradually lowering the external debt of budgetary entities by $1–2bn annually. To this end, a comprehensive medium-term strategy is being finalised to ease the public debt burden. The strategy focuses on diversifying both domestic and international financing sources to reduce borrowing costs and extend debt maturities. As part of this approach, the government plans to introduce new and diversified financial instruments in the local market, including retail bonds and sukuk (Islamic bonds), to attract a broader range of investors.
Kouchouk announced that public sector salaries for July 2025 will be disbursed with the newly approved increases. The lowest pay grade will receive a total monthly raise of EGP 1,100. Civil service employees will receive a 10% annual salary increase, while non-civil service employees will see a 15% increase, with a minimum monthly raise of EGP 150. Additionally, a fixed incentive ranging between EGP 600 and EGP 700 will be provided to all employees. The new draft budget allocates EGP 679.1bn to wages, reflecting an annual growth rate of 18.1%. Provisions have also been made to recruit over 75,000 teachers, 30,000 doctors, and 10,000 staff members in various government departments, with the aim of strengthening public services.
Social and Infrastructure Investments
Reaffirming the government’s commitment to protecting vulnerable groups, Kouchouk said that EGP 742.5bn has been allocated to social protection in the new budget, marking a 16.8% year-on-year increase. A total of EGP 160bn has been earmarked for food subsidy programmes, representing a 19% increase, in an effort to ease the burden on households. Furthermore, EGP 150bn has been allocated to support petroleum products and electricity, ensuring continued energy sector stability and meeting the needs of both citizens and national development efforts.
Social spending has also been significantly expanded. The “Takaful and Karama” social protection programme will receive EGP 54bn, a 35% increase compared to the previous year. EGP 45bn has been allocated to cover the cost of medicines and medical supplies, representing a 26% increase, while EGP 15.1bn has been set aside for medical treatment at the state’s expense, a 50% rise aimed at ensuring greater access to quality healthcare for low-income citizens. An additional EGP 27bn will be directed to public services such as sanitation and waste collection, representing a 35% annual increase.
The draft budget also includes EGP 227bn in contributions to pension funds, EGP 13.6bn for housing support targeted at low-income citizens—an increase of 14.3%—and EGP 3.5bn for extending natural gas connections to homes in both urban and rural areas. Investment in transport infrastructure includes EGP 5.2bn for the railway sector, EGP 1.8bn for student and metro fare subsidies, and EGP 2.5bn to support public transport users in Cairo and Alexandria.
Kouchouk reiterated that the FY2025/2026 budget will remain focused on growth, macroeconomic stability, and a strong partnership with the business community. A key highlight is the allocation of EGP 78bn—the largest ever—for supporting industrial and export-oriented activities. To encourage private sector growth, the government will implement tailored financial policies, initiatives, and programmes designed to enhance competitiveness and stimulate economic expansion.
Tourism investments will benefit from EGP 8.4bn in dedicated support to expand hotel room capacity and accommodate increased tourist flows. Export promotion efforts will receive a major boost, with EGP 44.5bn allocated to stimulate outbound trade—an increase of 93% from the current fiscal year—alongside the rollout of a modern and ambitious export support programme.
To further strengthen domestic industry, the government has earmarked EGP 29.6bn to support industrial production, marking a 69% increase over the current year’s budget. This will be complemented by EGP 8bn in funding for priority sectors to expand local manufacturing capacities, particularly in the production of machinery and equipment. The budget also includes EGP 5bn in direct cash incentives to support various initiatives targeting small, medium, and micro enterprises. An additional EGP 3bn has been allocated to develop the automotive sector and its components, while a further EGP 3bn will be directed towards initiatives aimed at accelerating the shift to more efficient and affordable energy sources.
Kouchouk confirmed that the constitutional allocations for the health and education sectors have been fully met in the FY2025/2026 draft budget. He underscored the government’s firm commitment to implementing presidential directives aimed at bolstering investment in human development sectors, particularly healthcare, education, and scientific research.
The healthcare sector is set to receive EGP 617.9bn in the upcoming fiscal year. Notably, treatment at the state’s expense will increase by 50% to EGP 15.1bn, while allocations for medicines and medical supplies will rise by 26% to reach EGP 45bn. In the education sector, pre-university education will receive EGP 684.7bn, higher education is allocated EGP 358.2bn, and more than EGP 173bn has been earmarked for scientific research initiatives.
Medium-Term Fiscal Outlook
Kouchouk also outlined Egypt’s medium-term fiscal targets over a four-year horizon, during his presentation of the 2025/2026 financial statement to the House of Representatives under the theme, “A Budget for Growth, Stability, and Partnership with the Business Community.” He stated that the government aims to achieve a primary surplus equivalent to 4% of GDP in the next fiscal year and to reduce the overall budget deficit to 7.3% by June 2026, with a further decline to 5.5% in FY2026/2027.
Kouchouk stressed that fiscal priorities are being set based on available resources, alongside ongoing efforts to improve revenue generation, broaden the tax base, optimise the use of state assets, and enhance the efficiency of public spending. The government is also focused on boosting the performance and inclusivity of public finance, while ensuring adherence to ceilings on budgetary debt, general government debt, public investments, and state guarantees.
The budget has been formulated within a medium-term framework that extends over the next three fiscal years. Public revenues are expected to grow by 23% annually in both FY2026/2027 and FY2027/2028, before slowing slightly to 17% growth in FY2027/2028 and 18% in FY2028/2029. Public expenditure is projected to increase by 19% in FY2025/2026, followed by a more moderate 8% growth in FY2026/2027, and 15% growth in both FY2027/2028 and FY2028/2029.
Tax revenues for the upcoming fiscal year are forecast to reach EGP 2.6trn, equivalent to 13% of GDP. This figure is projected to rise to EGP 3.9trn by FY2027/2028 and EGP 4.7trn by FY2028/2029. These increases will be driven by ongoing economic expansion, the continued rollout of digital systems, and efforts to broaden the tax base through administrative reform and business sector engagement.
