Following Parliament’s approval, Finance Minister reveals key draft budget details for FY24/25

Cairo – June 4, 2024: In a statement following the House of Representatives’ approval of the FY2024/2025 state budget, Minister of Finance, Mohamed Maait revealed key details of the approved budget on Tuesday.

The total budget for the upcoming fiscal year is currently at approximately LE 5.5 trillion, a significant increase from the current fiscal year’s budget of about LE 3.4 trillion.

Regarding the budget deficit, Egypt forecasted the deficit to reach around LE 1.2 trillion in the next fiscal year, equivalent to 7.3 percent of the gross domestic product (GDP).

There are extensive efforts targeting a surplus of LE 591.4 billion, representing 3.5 percent Egypt’s estimated GDP, with Maait noting the significant impact of the one-time injection of fresh money from the Ras El Hikma deal.

Expected revenues for the FY2024/2025 are LE 2.6 trillion, with a target of boosting tax revenues by 30.5 percent, reflecting initiatives to enhance tax administration efficiency and broaden the tax base.

Maait stressed the implementation of a strategy to reduce the state budget agencies' debt rate to less than 80 percent of the GDP by June 2027.

The debt ceiling for the new fiscal year has been set at LE 15.1 trillion, indicating a downward trend from previous years, with strict measures in place to ensure adherence to this limit.

Expenditure Forecast

Maait explained that the approved budget for the next fiscal year sees a notable surge in public expenditures, rising by approximately 29 percent to reach LE 3.870 trillion, reaching around 22.6 percent of the GDP for the upcoming fiscal year.

The Minister also outlined various financing programs aimed at stimulating economic activity, particularly in supporting the industrial sector and export activities.

These initiatives total LE 40.5 billion, including funds to improve export, subsidies for industrial sector electricity prices, subsidies for productive sectors, cash incentives for small enterprises, support for the automotive industry, and continued support for farmers and agriculture.

State investments are expected to hit LE 496 billion, compared to LE 334 billion in the current FY’s estimates.

However, 44 percent of these investments are self-financed and will not impact the budget deficit, the minister noted.

A maximum limit of LE 1 trillion has been set for public investments across all state agencies and institutions.

Maait highlighted that constitutional obligations regarding health and education have been met, with allocations of LE 496 billion for health, LE 565 billion for pre-university education, LE 293 billion for higher and university education, and LE 140.1 billion for scientific research.