Minister of Finance Mohamed Maait has sent a message of reassurance to the public opinion regarding the performance of the Egyptian economy in light of the current global crises.
“Our economy is well, and is able to overcome these international challenges, and together we will overcome the global crisis just as we have overcome many challenges before,” said Maait.
“We are entering the new fiscal year with an ambitious budget that is more stimulating to growth, production, and economic recovery, in which the value of public expenditures amounts to about EGP 3tn, and public revenues of EGP 2.1trn. We aim for the highest primary surplus of 2.5% of GDP to deal strongly and quickly with global challenges. We also seek to maintain fiscal discipline, so that the expected budget deficit rate is about 6.9% by the end of the next fiscal year, compared to about 6.4% in June 2023. We will continue to exert efforts to gradually reduce debt rates to GDP to less than 80% in June 2027,” he added.
The Minister of Finance also indicated that the budget figures for the next fiscal year reflect the presidential directives to provide the largest possible support for economic activity and social security, and rearrange public spending priorities to ensure equitable distribution of the fruits of development.
He also pointed out that allocations for support and social protection have been increased to ease the burdens on citizens. EGP 127.7bn have been allocated to support food commodities, EGP 14.1bn for health insurance, medicines and treatment for individuals who are financially unable to pay for medical services, EGP 10.2bn to support social housing, EGP 28bn to support development, and EGP 202bn public treasury contributions to pension funds at an annual growth rate of 6%. The tax exemption limit will be increased by 50% for government and private sector workers at an annual cost of more than EGP 10bn, EGP 31bn for financing social security programmes, and EGP 3.5bn to cover the cost of delivering natural gas services to homes.
Maait said that the public treasury bears EGP 127bn interest rate difference for the initiative to provide financing to support agricultural, industrial, and tourist activities.
He stressed the government’s keenness on fulfilling the constitutional entitlement of the health sector with EGP 397bn in the new budget, as well as the university and pre-university education and scientific research sectors with EGP 691.5bn. He also explained that EGP 470bn were allocated for wages to improve the conditions of state employees. Additionally, the wage improvement package was disbursed. Moreover, the annual estimated cost of increasing the minimum wage is EGP 14bn.
He pointed out that the new budget includes the allocation of EGP 3.7bn to appoint 70,000 teachers, doctors, pharmacists, and others in various sectors, and EGP 500m to increase salaries of state employees.
The minister also said that government investment allocations have been increased to EGP 587bn to create new jobs and improve public services provided to citizens, in addition to continuing the implementation of the second phase of “Decent Life”.
He explained that the government aims to increase environmental sustainability projects to 50% of government investments, by approving a package of incentives and initiatives supporting green transformation and expanding renewable energy projects.
In addition to that, the government supports carrying out broad structural reforms to push the private sector to lead economic activity, through the government IPO programme, which will be implemented within the framework of the state ownership policy document.
He pointed out that EGP 6bn have been allocated to reduce electricity prices for industrial activities, and EGP 1.5bn to bear the cost of real estate tax on the industrial sector.