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We have news of the House of Representatives approval of next year’s state budget, updates on the automotive industry’s performance last month, and more.
Parliament approves FY 2024-25’s state budget
The Clap:
Egypt’s House of Representatives on Monday greenlit the next fiscal year’s 2024-2025 state budget and socioeconomic development plan after a month of deliberation.
The specifics:
For the upcoming fiscal year, the cabinet is forecasting growth at an additional 1.3% clip from the 2.9% economic expansion estimate in FY 2023–2024. From a forecast 35.7% this FY, headline inflation is expected to average 17.9% over 2024-2025.
Projections of an uptick in our budget deficit:
The government is now anticipating a 0.1% rise in our fiscal deficit from 7.2% of GDP this year.
And dispelling previous rumors, cabinet won’t be eying tax hikes:
“We are not seeking to impose new taxes, but will be trying our best to widen the scope of the tax base through developing an electronic taxation system,” Finance Minister Mohamed Maait said, confirming his statement last week.
Remember:
This is the first budget formulated after the amendments in the Unified Budget Act.
What does that mean?
Per the new amendments, all 59 state economic organizations’ budgets are combined into a single state budget. The budgets of forty economic entities will be introduced progressively over the course of five years, starting in FY 2024–2025.
Impetus:
The aim is to “show the real financial capabilities of the state through consolidating all its revenues and expenditures with those of the economic bodies,” according to Maait. While the regular state budget projects revenues of EGP 2.1 trillion over the next fiscal year, the consolidated one also entails revenues from 40 economic bodies that are forecast to add EGP 2.9 trillion.
Egypt’s auto industry bounces back in April after record slump
The Clap:
Egypt’s automotive industry recorded a 35.1 % rise in sales month-on-month (MoM) to 5700 vehicles after a record 43% fall MoM in March, the Automotive Marketing Information Council details. Domestic car sales also surged by around 18.4% year on year (YoY) in the first four months of 2024 to nearly 23,500 units.
Driving the sales rally:
The surge in passenger car sales, which increased 65.5% MoM to 4600 vehicles in April, was the main driver of the rebound. Sales of passenger automobiles also increased by 11% between January and April, reaching 17,900 vehicles.
A fall in bus and truck sales:
Sales of buses and trucks decreased from the previous month. Bus sales saw a 37% MoM decline to 329 vehicles, while sales of trucks saw a 14.2% MoM fall to 789 units. Over the first four months of the year, truck sales fell 16% YoY to 3,600 units, while sales of buses recorded a 28.7% YoY decrease to 1,800 units.
Nissan took the crown:
After selling 3,700 cars between January and April, the Nissan brand had the highest market share of 15.9% in the local market, while Toyota followed its lead at
a 14.6% market share, and Chevrolet trailed in third place with a 13.9% market share.
Follows a multi-year struggle for the industry:
Auto sales fell to a 4.5 year low in 2022 owing to import restrictions on the back of the FX shortage the country had wrestled with. Auto sales also declined late in 2023 as market supply contracted, and gave distributors the power to raise prices as they saw fit, which saw consumers shy away from buying up units.
The Clap:
Confirming earlier reports of drug price hikes, the Egyptian Drug Authority (EDA) has started sending out new pricing guidelines to local big pharma players, head of the Federation of Egyptian Chambers of Commerce’s pharma division Ali Auf told Enterprise.
How much will the new price tags set you back?
In line with March reports that about 3000 drugs and medicines are expected to see a price hike, Auf told the news outlet the new price increase will range from 10-50% depending on each company’s cost criteria.
Which drugs are targeted?
Price increases will only affect newly manufactured drugs and do not include products already in stores. Meds for chronic illnesses are also targeted for smaller price upticks than those for diseases that are not long-lasting, he said.
Remember:
Egypt’s FX shortage, import restrictions, and inflation woes have hampered pharma companies efforts to bring in needed raw materials to boost domestic production, leading to a number of key drugs — including ones for immune diseases, diabetes, and multiple sclerosis — to vanish from pharmacy shelves. Last year, pharma firms submitted requests to the EDA to increase the prices of 3,500 drug items, with each company requesting an average increase of 25% as a first phase.
Just what the doctor ordered?
The price hikes are expected to see shortages of some meds in the Egyptian market “resolved within the next ten days,” Enterprise quotes Auf as saying.
What else is clapping?
The Central Bank of Egypt (CBE) auctioned off USD-denominated treasury bills with a one-year maturity worth USD 500 million. The T-bill auction is aimed at settling a previous auction issued in June last year, during which the CBE raised USD 554.1 million.
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