The Egyptian government approved the budget for the next fiscal year (social networking sites)

The Egyptian Cabinet approved the budget for the fiscal year 2024-2025 with an expenditure size of 6.4 trillion pounds ($135.4 billion) and expected revenues of 5.05 trillion pounds ($106.9 billion).

  • The Egyptian government allocated 636 billion pounds to social protection programs, while saying it would seek to curb public spending to reduce debt.

  • The Council of Ministers allocated 144 billion pounds to support food supplies, which is a food subsidy program that provides basic commodities such as bread, rice, and sugar at reduced prices to about 60 million of Egypt’s population of more than 105 million people.

  • The Council also allocated 154 billion pounds to support petroleum products.

Egypt depends on imports of wheat, other basic foodstuffs, and fuel, and suffers from a significant shortage of foreign currencies and a large budget and balance of payments deficit.

The Council of Ministers set for the first time a maximum limit for public investment spending at one trillion pounds in the fiscal year 2024-2025, as it seeks to put the debt-to-domestic product ratio on a downward path to reach 80% in June 2027.

The Council of Ministers added that 50% of the proceeds from the sale of assets will be used to directly reduce government debt.

The government stated, in a statement, that Egypt targets a primary surplus of 3.5% of GDP in the new budget.

The primary surplus means revenues minus expenses without debt service provisions.

growth rate

The Minister of Planning, Hala Al-Saeed, said that the budget expects a growth rate for the next fiscal year of 4.2%, while the International Monetary Fund estimates Egypt’s economic growth rate during the fiscal year 2024-2025 at about 4.7%.

The Minister expected that 4 sectors would contribute about 51% of the gross domestic product, and represent the most important productive activities (agricultural, industrial, and real estate) in addition to commercial activities.

The budget includes an increase in the share of private investments, to reach about 50% of the total investments.

The Ras al-Hikma deal paved the way for subsequent economic measures (Source: Egyptian Cabinet via Facebook)

Financial packages

  • This month, the World Bank pledged to provide more than $6 billion to Egypt, with $3 billion allocated to government programs and $3 billion to the private sector.

  • Egypt recently agreed with the International Monetary Fund to increase the size of the loan from $3 billion to $8 billion, bringing the total external financing to the country in the future to $20 billion, from the World Bank and the European Union.

  • The European Union agreed to provide Egypt with a financial package worth 7.4 billion euros ($8.06 billion), which includes soft loans worth 5 billion euros ($5.44 billion) and investments worth 1.8 billion euros ($1.96 billion). In addition to grants amounting to 600 million euros ($653 million), including 200 million euros ($217.7 million) to deal with immigration problems.

Dollar flows to Egypt, which suffers from a shortage of foreign exchange, have witnessed recent momentum, following the country’s signing of an agreement worth $35 billion with the UAE to develop a tourism project in the Ras El Hekma area. Among the value of the deal is $11 billion in Emirati deposits in the Central Bank of Egypt, which will be transferred to invest in the project. .

Egypt sells assets to collect hard currency, and reduced the value of the pound, which fell on the official market, to reach a ceiling of 50 pounds to the dollar. It also raised interest rates by 6% once.

Source: Al Jazeera + Reuters