On Monday, the Senate gave a final nod to the socio-economic development plan for fiscal year (FY) 2025-26. The approval came after Minister of Planning, Economic Development, and International Cooperation Rania Al-Mashat delivered a statement reviewing the objectives of the plan.
Al-Mashat stressed that the 2025-26 development plan had been prepared against a backdrop of global tension and geopolitical crises. “We are still suffering from the Russia-Ukraine war, the Israeli war on Gaza, attacks on shipping in the Red Sea and new American policies on tariffs. In the face of these, the socioeconomic development plan adopted a balanced approach that aims to enhance the resilience of the Egyptian economy,” Al-Mashat told senators.
She said the package of fiscal and monetary reform measures introduced since March 2024 had “helped Egypt break free of the vicious cycle that has hit the Egyptian economy over the past three years and contributed to consolidating macroeconomic stability”.
Al-Mashat added that the development plan for the next fiscal year aims to enhance the ability of the economy to withstand crises and geopolitical tensions and accelerate growth.
According to Al-Mashat, signs of economic improvement include a growth in tourism revenues to $4.8 billion in the first quarter of FY 2024-25, compared to $ 4.5 billion during the same period of FY 2023-24. The Central Bank of Egypt’s foreign exchange reserves rose to $47.4 billion at the end of February 2025, compared to $35.3 billion in February 2024 “despite the drop in Suez Canal’s foreign exchange revenues due to disruption in the Red Sea.”
Other indicators of improved economic performance cited by Al-Mashat included a drop in inflation rates, the increase in the value of remittances from Egyptians working abroad to $17.1 billion in the first half of FY 2024-25 compared to $ 9.4 billion during the same period in FY 2023-24, and a boom in net foreign direct investments from $10 billion in FY 2023-24 to $46.1 billion in FY 2024-25.
The new plan targets an economic growth rate of 4.5 per cent, well above the 2.4 per cent recorded in FY 2023-24.
Al-Mashat confirmed that the GDP is expected to rise to LE20.4 trillion at current prices, an 18 per cent increase on the LE 17.3 trillion expected at the end of FY 2024-25.
The plan targets total investments of around LE3.5 trillion, well above the LE2.6 trillion expected at the end of FY 2024-25, a reflection, said Al-Mashat, of the government’s appreciation that investment is an effective driver of economic growth.
The minister confirmed that the investment rate will continue to rise, reaching 17.1 per cent of GDP in 2025-26, compared to 15 per cent and 13 per cent in FY 2024-25 and FY 2023-24.
“Government investments will not exceed LE700 billion, compared to LE1 trillion in the current FY, allowing greater room for the private sector to boost the Egyptian economy, rationalise public spending and reduce the debt burden resulting from servicing domestic and external public debts.”
Al-Mashat emphasised how the plan complements the National Structural Reform Programme which aims to enhance macroeconomic stability, raise competitiveness and improve the business environment in a way that increases private sector participation and supports the transition to a green economy.
Public investments directed to the health, education, scientific research, and other service sectors will reach LE327 billion under the plan.
“One of the main objectives of the socioeconomic development plan is to consolidate human development by directing a significant percentage of total investments to modernising and developing health and education services and making them available to all citizens,” said Al-Mashat.
“Amounts directed to local development in governorates will reach LE24.3 billion, 35 per cent of which will go to Upper Egyptian governorates.”
The socio-economic development plan will now go to the House of Representatives where it will be discussed by MPs and put up for vote in a plenary session.
* A version of this article appears in print in the 22 May, 2025 edition of Al-Ahram Weekly
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