CAIRO: Egypt’s cabinet approved a 4.6 trillion Egyptian pound ($91 billion) draft state budget for the financial year that will begin in July, a government statement said on Wednesday, as it continues to tighten its finances under an IMF programme.
Expenditures will rise by 18% and revenue by 19% over the current 2024/25 budget. Revenue is expected to hit 3.1 trillion pounds, working out to a deficit of about 1.5 trillion pounds ($30 billion).
The increased expenditure partly reflects elevated headline inflation, which was running at an annual 12.8% in February.
Financial reforms under an $8 billion financial reform programme signed in March 2024 with the International Monetary Fund have helped Egypt bring inflation down from a peak of 38% in September 2023.
The IMF this month approved the disbursement of $1.2 billion to Egypt after its fourth review of the programme.
The new budget targets a primary surplus of 795 billion pounds, equal to 4% of GDP, up from the 3.5% primary surplus originally targeted in the 2024/25 budget.
The IMF granted the government a waiver in the fourth review after the surplus came in 0.5% of GDP lower than Egypt’s earlier commitment.
In its third review in June, the IMF praised Egypt for its “strict control of spending”.
The new budget also lowers public debt to 82.9% of GDP from an expected 92% in 2024/25, the cabinet statement said.
The cabinet said 732.6 billion pounds in spending in the new budget would be allocated for subsidies, grants and social benefits, an increase of 15.2%.
The budget increases commodities and bread subsidies by 20% to 160 billion pounds. It will also include 75 billion pounds to subsidise petroleum products, 75 billion pounds to subsidise electricity and 3.5 billion pounds to subsidise natural gas deliveries to households, the statement added.
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