Egypt achieves primary surplus of 6.1% during FY2023/2024

In the fiscal year 2023/2024, Egypt allocated LE 12.9 billion to bolster exports, pushing the total export support disbursed to over 3,000 companies to LE 65 billion since October 2019. Minister of Finance Ahmed Kouchouk revealed these figures during a press conference.

 

Kouchouk emphasized that Egypt ramped up its backing of industrial production to LE11 billion in 2023/2024, a significant increase from the previous amount of 1 billion.

 

The country achieved a primary surplus of 6.1 percent in 2023/2024, attributed to revenues generated from the Ras El-Hekma deal, as per Kouchouk.

 

The Egyptian government managed to trim spending by 2.2 percent of GDP and slashed the budget deficit to 3.6 percent. Kouchouk affirmed Egypt's objective to attain yearly primary surpluses to drive the debt-to-GDP ratio below 85 percent by the upcoming fiscal year's conclusion.

 

Despite challenging economic circumstances, the internal debt to the budget ratio dropped by 4.7 percent of GDP. Egypt witnessed a revenue growth rate of 60 percent, surpassing expenditure growth. Non-tax revenues soared by 190 percent due to diversified state resource streams, notably the Treasury's acquisition of 50 percent of the Ras El-Hekma deal.

 

Education spending surged by 25 percent, healthcare by 24 percent, and social protection by 20 percent in the previous fiscal year, outpacing expenditure growth without debt service, which stood at less than 18 percent.

 

Egypt allocated LE 500 billion for the Haya Kareema national project's initial and subsequent phases to enhance the quality of life for half of Egyptians. Social support and protection allocations totaled LE 550 billion compared to the 2020/2021 fiscal year.

 

Support for petroleum products exceeded LE 165 billion, while assistance for food supplies climbed over LE 133 billion. The government disbursed over LE 35 billion towards the Takaful and Karama program pensions and settled dues amounting to LE 913.2 billion by June 2024.

 

Approximately 2,527 investors benefited from the productive sectors support initiative, amounting to around LE 80 billion, with the treasury absorbing interest rate discrepancies.

 

Although the debt service bill remains elevated due to inflation and interest rates, Egypt aims to reduce it to 35 percent of total expenses in the medium term. The balance of budget agencies' external debt dropped by over $3.5 billion by June 2024, marking a reduction of more than 4 percent compared to June 2023.

 

International bond yields in the secondary market observed a 6 percent decrease for 3-year bonds and a 3.1 percent decline for 5-year bonds compared to their February prices.