What:
Finance Minister Mohamed Maait just unveiled the draft state and public government budgets for FY 2024/2025 to members of parliament, introducing a separate public government budget for the first time. This new approach will display the finances of around 40 state economic bodies alongside the traditional state budget.
Macro Goals Insight:
The budget aims for an economic growth acceleration to 4.2% from the current 2.9%, alongside a significant reduction in inflation to an average of 17.9% from 35.7% this fiscal year. Oil and wheat prices are expected to stabilize, providing some economic relief.
Financial Dynamics:
Revenues are expected to increase by 8.5% to EGP 2.6 trillion, with taxes making up the bulk. Expenditures are set to rise to EGP 3.9 trillion, focusing on social support, public investment, and debt servicing which is expected to climb by 34.9%.
Debt and Deficit:
The budget projects a decrease in the debt-to-GDP ratio and a slight increase in the budget deficit to 7.3% of GDP. This reflects ongoing efforts to manage debt levels while fostering growth.
Consolidated Figures:
The inclusion of state economic entities pushes the consolidated revenue forecasts up to EGP 5.3 trillion, with an equal rise in expenses, highlighting the comprehensive scope of this new budgetary framework.
Social Safety Net:
The budget proposes a 19% increase in social support to EGP 636 billion, with notable rises in fuel and food subsidies to combat inflation and support the vulnerable.
Now What:
The budget now heads to the House’s Budget Committee for further discussion and must be passed before the new fiscal year begins on July 1. In parallel, the socioeconomic development plan will undergo Senate scrutiny.
