Egypt’s Finance Minister announced a record primary surplus of LE 330 billion, driven by a 38.4% increase in tax revenues. Significant increases in health and education spending, alongside a 44% rise in social benefits, reflect the government’s commitment to vulnerable populations. Planning for the FY2025/2026 budget emphasizes economic growth and social support, alongside fiscal discipline and debt management strategies.
Egypt’s recent fiscal performance shows a primary surplus of approximately LE 330 billion from July 2024 to February 2025, marking a historic achievement. Finance Minister Ahmed Kouchouk attributes this to the government’s enhanced revenue-generating strategies aimed at creating financial stability. In a discussion with Prime Minister Mostafa Madbouly, Kouchouk noted that tax revenues witnessed a significant year-on-year growth of 38.4%, reaching the highest annual increase in recent years.
The increased tax revenue has facilitated higher spending on essential sectors. Health and education expenditures rose by 29% and 24%, respectively, compared to the previous fiscal year. Additionally, spending on subsidies, grants, and social benefits surged by 44%, reflecting a commitment to supporting vulnerable populations. Improvements in debt management were also highlighted, focusing on more strategic distribution of interest payment obligations throughout the fiscal year.
Furthermore, Kouchouk reported that the growth of treasury-funded investments has slowed, aligning with the government’s priorities of managing public spending efficiently. Looking forward, the FY2025/2026 budget emphasizes stimulating economic growth and enhancing job creation, with a focus on productive sectors, tourism, and technology. Financial and economic stability remain a priority, alongside commitments to reduce debt and secure energy resources.
A notable increase in allocations for social protection and human development programs aims to bolster support for disadvantaged groups. Initiatives such as the Takaful and Karama program and other health and social welfare projects will see expanded funding. During his meeting, Kouchouk provided insight into Egypt’s IMF reform program, confirming the approval of the fourth tranche disbursement and detailing plans for the fifth review while emphasizing strategies to reduce budget institutions’ debt.
Overall, Egypt’s fiscal strategy for FY2025/2026 seeks to balance economic growth with fiscal responsibility, aiming to foster continued development and ensure stable economic conditions.
Egypt’s fiscal position showcases a record primary surplus that provides a foundation for increased public spending while simultaneously managing debt more effectively. The government’s focus on enhanced revenue collection, critical sector investments, and support for vulnerable populations indicates a comprehensive strategy aimed at achieving sustainable economic growth and stability. Continued alignment with IMF objectives and strategic spending should further support these aims in the coming fiscal year.
Original Source: www.egypttoday.com
