Egypt’s cabinet has approved a draft state budget of 4.6 trillion Egyptian pounds ($91 billion) for the upcoming financial year starting in July, as the country continues financial tightening under an $8 billion International Monetary Fund (IMF) program.
According to a government statement released Wednesday, expenditures will rise by 18%, while revenues are projected to increase by 19%, reaching 3.1 trillion pounds. However, the budget deficit is expected to be around 1.5 trillion pounds ($30 billion).
The increased spending partly reflects Egypt’s ongoing battle with inflation, which stood at 12.8% in February. This marks a significant improvement from the 38% inflation peak in September 2023, thanks to financial reforms implemented under the IMF program. Earlier this month, the IMF approved a $1.2 billion disbursement to Egypt following its fourth program review.
The new budget aims for a primary surplus of 795 billion pounds, or 4% of GDP, surpassing the previous target of 3.5%. Public debt is also projected to decline to 82.9% of GDP, down from an expected 92% in the current financial year.
A significant portion of the budget—732.6 billion pounds—has been allocated for subsidies, grants, and social benefits, reflecting a 15.2% increase. Notably, food and bread subsidies will rise by 20% to 160 billion pounds, with additional allocations for petroleum and electricity subsidies.
Egypt’s continued fiscal discipline and IMF-backed reforms signal a cautious yet ambitious approach to economic stabilization and debt reduction.
