Egypt Allocates EGP 40.5Bn To Finance Economic Stimulus Programmes In New Budget

(MENAFN- Daily News Egypt) The Egyptian government has earmarked a significant EGP 40.5bn to finance various economic stimulus programmes in its new budget. Minister of Finance, Mohamed Maait, presented these allocations to the parliament.

Designed to address ongoing global economic challenges, the fiscal year (FY) 2024/25 budget prioritizes both economic stimulus and fiscal discipline. Let's delve into the key details:

  • Economic Stimulus Allocations :
    • EGP 23bn is dedicated to expediting the refund of export burdens.
    • EGP 6bn is earmarked for reducing electricity tariffs in the industrial sector.
    • EGP 8bn covers interest subsidies on financing facilities for productive sectors (industry and agriculture).
    • EGP 1.5bn provides cash incentives for SMEs and micro-enterprises.
    • EGP 500m supports the auto industry strategy.
  • Balancing Inflationary Pressures :
    • Minister Maait acknowledges the inflationary pressures faced by citizens over the past two years.
    • The budget aims to strike a balance between alleviating these burdens, addressing development needs, and maintaining fiscal discipline.
  • Budget Deficit and Investment Allocations :
    • The overall budget deficit for the upcoming fiscal year is estimated at EGP 1.2trn, representing 7.3% of GDP.
    • Investment allocations are projected to increase to EGP 496bn, with 44% of these investments being self-financed.
    • A maximum limit of EGP 1trn has been set for public investments across all state agencies and institutions.
  • Revenue and Tax Targets :
    • Total public revenues for the new fiscal year are projected to reach EGP 2.6trn, constituting 15.4% of GDP.
    • Tax revenues are targeted to grow by 30.5%, exceeding EGP 2trn.
    • Efforts include enhancing tax administration efficiency, expanding the tax base, and collecting taxes due to e-commerce activities.
  • Debt-to-GDP Ratio and Fiscal Strategy :
    • The strategy involves setting a binding ceiling for the debt of general government entities at EGP 15.1trn for the new fiscal year.
    • This translates to a debt-to-GDP ratio of 88.2%, marking a decline from the 96% recorded in FY year 2022/23.
    • The government aims to further decrease this ratio to 90% by June 2024.
  • Social Support and Expenditures :
    • The budget allocates a total of EGP 3.87trn for public expenditures, representing 22.6% of expected GDP.
    • Prioritizing social support spending, it includes:
      • EGP 154.5bn for petroleum product subsidies.
      • EGP 134.2bn for food subsidies.
      • EGP 40bn for social security pensions and Takaful and Karama programmes.
      • EGP 11.9bn for social housing.
      • Other allocations cover health insurance, medicines, and treatment for the underprivileged.
  • National Social Insurance Authority :
    • The budget allocates EGP 214.2bn to fully settle the treasury's obligations to the National Social Insurance Authority by June 2025.

    Minister Maait emphasizes the commitment to fiscal responsibility and targeted debt reduction. The government aims to accelerate the reduction of the debt-to-GDP ratio of general government entities to less than 80% by June 2027, subject to exceptional circumstances requiring approval from relevant authorities.


  • Daily News Egypt

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