State spending limit to curb inflation says PM

Cairo – May 21, 2024: Prime Minister Mostafa Madbouly explained that Egypt aims to reduce inflation rates by limiting public investments. The PM reviewed the implementation of the state’s LE 1 trillion cap on investments for the coming fiscal year (FY2024/2025) during a meeting on Monday.

This reflects a larger plan to regulate public finances and stabilize the economy amidst inflationary challenges.

Minister of Finance, Mohamed Maait, revealed the cap back in March, noting that it aimed to create more opportunities for the private sector to participate in the economy.

Maait added that the state would be adopting a new to sustainable reduce public investments, and that all investment projects managed by state-owned entities would be subject to the limit.

On Sunday’s meeting, Madbouly underscored the importance of the newly established “Committee for the Governance of Total Public Investments in the State,” charged with gathering investment data from all government bodies and ensuring compliance with the spending limit.

Key officials, including Minister of Planning and Economic Development Hala El-Said, Head of the Central Auditing Agency Hisham Badawi, and Deputy Minister of Finance Ahmed Kouchouk, participated in the meeting.

Chaired by the Central Auditing Agency, the committee will be aided by a technical secretariat comprising representatives from the Ministries of Planning and Finance.

El-Said provided an update on the committee's progress, highlighting the decision to create the secretariat to streamline decision-making processes. The Ministries of Planning, Finance, and the Public Enterprises Sector were directed to ensure timely submission of investment data to the committee.

The meeting also addressed the draft law for the FY2024/2025 economic and social development plan, currently awaiting approval from the House of Representatives. El-Said emphasized that the plan's objectives will align with the allocated investment resources.

The Central Auditing Agency will play a pivotal role in overseeing the enforcement of the investment cap across all ministries and agencies. This government action reflects a broader strategy to manage public finances and stabilize the economy amidst inflationary challenges.