Doaa A.Moneim - Ahram

Egypt’s cabinet has approved in its meeting on Wednesday the draft budget for the upcoming FY 2024/2025 to send to the House of Representatives by the end of March, the cabinet said in a statement.

During the meeting, Minister of Finance Mohamed Maait stated that the budget includes the "general budget of the state administrative apparatus and all economic entities," with total government expenditures amounting to EGP 6.4 trillion and revenues to EGP 5.05 trillion.

Maait added that the new budget reflects the structural reforms implemented by the recent amendment to the Unified Public Finance Law, which introduced the concept of the "general government budget."

He also said the new general state budget aims to achieve a large primary surplus of more than 3.5 percent of GDP, reduce the overall deficit over the medium term to six percent, and put the debt-to-GDP ratio on a downward path to reach 80 percent in June 2027.

These goals, Maait explained, will be attained through a new strategy that includes setting a legal ceiling for the "general government" debt that cannot be exceeded without the approval of the President of the Republic and the cabinet.

In addition, he highlighted that half of the proceeds from the "offerings" program would be directed to reducing the size of the government's debt directly and extending its life.

Egypt is currently under a loan program with the IMF, which has been recently extended to $8 billion to address the imbalances in the country’s budget and respond to the repercussions of global and regional tensions.

Maait also pointed out that a ceiling has been set for the total public investments of the state, including all its entities and bodies, so they do not exceed EGP 1 trillion in FY2024/2025.

“This is to make room for the private sector in a way consistent with the state's efforts to increase the contributions of this important sector to economic development activity,” he explained.

Moreover, Maait also noted that the budget’s revenues are set to grow by 36 percent to reach EGP 2.6 trillion, while expenditures should grow by 29 percent to reach EGP 3.9 trillion.

He noted that President Abdel-Fattah El-Sisi directed the government to increase the allocations for the health and education sectors by more than 30 percent.

The president also directed to raise the allocations for support, grants, and social benefits to EGP 636 billion, of which EGP 144 billion are dedicated to supporting food commodities and EGP 154 billion to petroleum products due to the rise in global oil prices and the impact of the change in the exchange rate.

In addition, the president issued instructions to allocate EGP 215 billion for pensions, EGP 23 billion for export subsidies, and EGP 40 billion for "Takaful and Karama".

Maait also stated that the government aims to grow non-tax revenues by 60 percent and tax revenues by 30 percent in FY2024/2024, without adding any tax burdens on citizens or investors.

“This will be done by expanding the tax base through utilizing electronic tax systems in integrating the informal economy into the formal economy,” he said.