On Tuesday, Finance Minister Ahmed Kouchok presented the 2025-26 budget to MPs, describing it as “a budget for growth, stability and partnership with the business community”. The budget will be supported by reforms, and buoyed by noticeable improvements in financial and economic performance over the past nine months, or since the new government came to office in July 2024, said Kouchok.
Kouchok told MPs that between July 2024 to March 2025 public revenues had grown by 32 per cent and expenditure by 24 per cent, with the government generating LE1.4 trillion in tax revenues, the highest figure in years, without any new taxes being imposed.
The last nine months also saw a record primary surplus of LE435 billion, representing 2.5 per cent of GDP, despite the fact that Suez Canal revenues fell by LE110 billion and the government was obliged to disburse additional allocations of LE150 billion to stabilise the energy sector and curb power outages.
Other positive indicators include exchange reserves climbing to $47.7 billion and a fall in inflation from 33.3 per cent in March 2024 to 13.6 per cent last month, said Kouchok.
The private sector accounted for 59 per cent of total investments during the last nine months, a growth rate of 80 per cent, with the tourist sector growing by 13.1 per cent, non-oil manufacturing by 12.4 per cent, and communications and information technology by 15.1 per cent. In the same period, foreign debt fell by $1 billion.
Kouchok said revenues in fiscal year 2025-26 are expected to increase by 23 per cent to reach LE3.1 trillion ($61 billion), and expenditure to increase by 19.2 per cent to LE4.6 trillion ($91 billion).
Most of the increase will come from taxes which are expected to hit LE2.6 trillion, up from LE2 trillion in FY 2024-25.
“We are simplifying tax procedures to build trust with the business community and expand the tax base,” said Kouchok,
The new budget has four objectives: maintaining financial stability, building trust between the Tax Authority and the business community, increasing spending on human development programmes, and adopting a balanced fiscal policy to drive growth.
The budget targets a primary surplus of LE807 billion, or four per cent of GDP, on the back of tax reforms.
Improved financial and economic performance and surplus growth is expected to reduce the budget deficit to 7.3 per cent by the end of June 2026, and the government is working to reduce foreign debts by LE 1-2 billion annually to reach 81 per cent of GDP by the end of June 2026.
One goal of the new budget, Kouchok told MPS, is to improve the living standards of citizens and support the most vulnerable classes. “This will come through striking a balance between fiscal discipline and easing pressures on poor and limited-income classes,” with LE742.5 billion allocated to social protection programmes in the form of subsidies, grants and benefits, a 16.8 per cent increase.
Ration card subsidies will reach LE160 billion, a 19 per cent increase, and subsidies on fuel products and electricity will cost LE150 billion. More than LE54 billion will be allocated to social security programmes, an increase of 35 per cent.
The pre-university education sector has been allocated LE684 billion, the higher education sector LE358 billion and scientific research LE173 billion.
The health sector will receive LE617.9 billion, with LE45 billion earmarked for medicines and medical supplies, an increase of 26 per cent, and LE15.1 billion going to state-funded treatment for low-income citizens, a 50 per cent increase.
The government’s salary bill will increase from LE575 billion in FY 2024-25 to LE679.1 billion, an increase of 18.1 per cent. Salaries of state employees will increase by at least LE1,100 per month, starting in July, said Kouchok. Civil servants and workers at state-owned enterprises will see salary and bonus increases by 10 per cent and 15 per cent respectively.
Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat said Egypt’s 2025-26 socioeconomic development plan was prepared against a backdrop of global tension sand geopolitical crises. “We are still suffering from the Russia-Ukraine war, the Israeli war on Gaza, attacks on shipping in the Red Sea and now new American policies on tariffs. Due to these circumstances, the socioeconomic development plan adopted a balanced approach that aims to enhance the resilience of the Egyptian economy,” Al-Mashat told MPs.
The budget targets economic growth of 4.5 per cent “though it is possible that the rate will be downsized if global and regional conflicts become more severe,” said Al-Mashat.
She confirmed that the new plan sets a ceiling of LE1 trillion on government investments to allow greater room for the private sector to boost the national economy.
“Government investments in the new plan will not exceed LE700 billion and the door will be open for foreign and Arab investment partnerships,” said Al-Mashat.
Public investments directed to the health, education, scientific research, and other service sectors will reach around LE327 billion under the plan.
“These allocations underscore the importance of investing in human development programmes to raise living standards and improve public services,” said Al-Mashat.
The 2025-26 budget and socioeconomic development plan were referred to parliament’s Budget Committee for review and will be subject to a final vote in a plenary session before the end of June.
* A version of this article appears in print in the 17 April, 2025 edition of Al-Ahram Weekly
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