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.
