Maait underscores Egypt’s positive financial performance, GDP deficit down to 6%

Reducing the GDP deficit to 6 percent, as well as increasing the primary surplus and investments funded by the public treasury, were some of the positive financial performance indicators achieved during the 2022/2023 fiscal year despite the challenging global economic landscape, Minster of Finance Mohamed Maait explained in an official statement.

These, and the continuous efforts to mitigate the negative effects of global challenges, demonstrated Egypt's strong management of public finances, Maait said.

The finance minister noted that rising prices of critical global commodities, fueled by disruptions in supply chains, led to unprecedented increases in fuel and food costs, with the Egyptian pound’s depreciation against the US Dollar and market uncertainties and fluctuations posing substantial challenges.

He also noted the higher cost of financing and difficulty in accessing international markets to bridge financing gaps.

Maait noted an increase in Egypt’s primary surplus rate of GDP to 1.64 percent to reach LE 164.3 billion and added that this was amid an increase of 18.9 percent in expenditures.

The Ministry of Finance allocated resources to support various sectors impacted by the conflict in Europe and slowed global economic growth, and was able to meet the needs of the health and education sectors, Maait added.

Furthermore, the minister addressed the rising costs of essential products in the local market, such as bread and petroleum, due to surging wheat and crude oil prices globally, highlighting that LE 191 billion was provided to the National Social Insurance Organization to bring up pension support to LE 701 billion in 4 years.

Maair emphasized that investments funded by the public treasury increased by 16 percent, reaching LE 230.3 billion, representing the government's commitment to improving citizens' quality of life.

Subsidies for food commodities surged to LE 121.8 billion, with wage and compensation increments totaling LE 413.7 billion, supporting initiatives aimed at enhancing workers' income and welfare.

Allocations for subsidies and social benefits expanded to LE 442.8 billion, reflecting a 29 percent increase, while funding for state-covered medical treatments rose by 22.9 percent. Subsidies for petroleum products surged by an impressive 93.5 percent, totaling LE 116 billion.

Tax revenues saw a significant boost, driven by technological enhancements in tax administration, integration of the informal economy, and tax justice pursuits.

Suez Canal revenues also surged, reaching LE 124 billion in FY 2022/2023 compared to the previous fiscal year’s recorded LE 72.5 billion, Maait noted.

Egypt’s debt rate is projected to reach 95.6 percent of GDP by this fiscal year's end, with Maait citing external challenges including exchange rate fluctuations. The pound’s devaluation led to an increase in Egypt’s debt by LE 1.3 trillion, or 13.1 percent of the GDP, however, Maait emphasized Egypt’s aim to gradually reduce the debt rate from the current fiscal year onward, aiming to achieve a range from between 75-79 percent of the GDP over the next 4 years.