Egypt’s 2026-2027 budget received cabinet approval on 26 March and was submitted to the House of Representatives for review this week.
The government submitted the draft budget to the House of Representatives before 1 April, the deadline set by the constitution, said Mustafa Salem, deputy chairman of the House’s Budget Committee.
Finance Minister Ahmed Kouchouk and Planning Minister Ahmed Rostom will deliver statements on the new budget and development plan for the fiscal year 2026-2027 before the House of Representatives, after which the draft budget and development plan will be referred to the House’s Budget Committee and other parliamentary committees to be discussed in detail in the presence of cabinet ministers, Salem said.
The discussion of the new budget comes against the backdrop of financial headwinds caused by the Iran war, which has begun exerting pressure on the state’s foreign-exchange resources, Salem told Al-Ahram Weekly.
As a result, “the Finance Ministry had no choice but to prepare a flexible budget capable of absorbing the economic and financial shocks triggered by the Middle East war and the ongoing global economic meltdown.”
The budget will be subject to change in the light of discussions with MPs in order to be sure of its approval, Salem said.
In a press conference on 26 March, Prime Minister Mustafa Madbouli said the negative effects of the Iran war are not only political, but also economic, hitting energy markets, supply chains, trade, financing costs, and growth expectations.
“The government continues to diligently monitor the spillovers of this war, so that it can act swiftly and efficiently to protect the stability of the Egyptian economy, in a way that secures supplies and enhances Egypt’s competitiveness in a highly volatile international environment, and so that the national economy can, as much as possible, preserve the gains it achieved in 2025 and in the first two months of 2026,” Madbouli said.
He said the new budget was prepared to ensure fiscal discipline through rationalising public spending, enhancing public revenues, and reducing government debt in a way that strengthens the economy’s ability to withstand the current challenges.
“It is a belt-tightening budget to contain the spillovers of regional and international conflicts,” he said.
According to Madbouli, “the day before the outbreak of the war, Egypt’s monthly natural gas import bill was $560 million, and today it has reached $1.65 billion, an increase of $1.1 billion per month. This will exert huge pressure on the state budget.”
Madbouli added that the day before the outbreak of the war, the price of oil was $69 per barrel, but then it increased to $93, and then fell to $87. On 27 March, it stood at around $112 per barrel.
He also pointed to the price of diesel, which is used for transportation and haulage, noting that this has jumped from $665 per ton to $1,665.
Butane gas has followed the same pattern, with its price being $510 per ton before the war, but now reaching $730, an increase of up to four per cent.
As a result, the government has effectively begun implementing a raft of “belt-tightening” measures to absorb the shocks of the Iran war in order to rationalise consumption, reduce energy use, reduce the import bill, and avert a large budget deficit, Madbouli said.
The measures include postponing the implementation of some major energy-intensive government projects, especially of diesel and petrol, for at least two months.
Starting 5 April, there will be “remote” working for one day a week, and this will continue for a month, with the possibility of increasing it to two days.
Factories, hospitals, schools, and universities are excluded from the remote-working directive.
Madbouli said that “the last thing the government wants is to exert financial pressure on people by raising fuel prices again, and to avoid this there is no way except rationalising consumption.”
He referred to the government’s decision to deduct 30 per cent from the energy and fuel allocations for vehicles owned by government authorities and agencies.
He said that “if the war continues for a longer period, we will need to resort to stricter measures to achieve greater efficiency.”
The rationalisation measures began on 28 March and will run for one month. During this period, all shops, commercial malls, restaurants, and coffee shops will close at 9 pm on weekdays, except for Thursdays and Fridays when they will be allowed to operate until 10 pm.
The government district in the New Capital will close at 6 pm, and when work ends and employees leave, the power network will be shut down to contribute to energy savings.
“Public employees will complete any remaining administrative work from home,” Madbouli said, indicating that “once the war ends, the government will reverse these measures.”
Kouchouk said that the 2026-2027 budget was drafted to flexibly address potential global and domestic economic challenges arising from the Middle East war.
“This budget is a draft, and it is subject to change in the light of the war’s spillovers and discussions with MPs,” Kouchouk said.
He added that public revenues are targeted to increase at a faster pace than spending, increasing by 27.6 per cent to reach LE4 trillion and up from LE3.1 trillion under the current budget.
Expenditures are expected to rise at a slower rate of 13.2 per cent to hit LE5.1 trillion, up from LE4.9 trillion from the year before.
Kouchouk said the new budget includes a 12 per cent increase in social welfare spending, bringing it to a total of LE832.3 billion, to protect vulnerable people from economic challenges and the risks arising from regional conflicts.
He said that the new budget prioritises the interests of citizens as well as investors and aims to stimulate economic activity. “It backs the health and education sectors, as well as social protection and boosting exports,” Kouchouk said, stating that “the state will continue partnering with the business community to achieve a balance between financial discipline and boosting economic activity.”
He noted that while social-protection programmes will receive LE832.3 billion (up 12 per cent from LE732.6 the year before), a total of LE90 billion has been earmarked within the budget for programmes that promote economic activity.
“Eligibility for incentives is, however, linked to tangible results on the ground,” he said.
Kouchouk highlighted that the debt-targeting budget aims to generate LE1.2 trillion as a primary surplus, representing five per cent of GDP, to provide additional funding for debt reduction and social protection.
He also indicated that the government targets to lower the overall budget deficit by around 1.2 per cent to reach 4.9 per cent of GDP by June 2027, while reducing the public debt-to-GDP ratio to 78 per cent, down from 82.9 per cent in 2025-2026 and from 86.8 per cent in 2024-2025 over the same period.
Rostom affirmed that the state’s new socio-economic development plan for fiscal year 2026-2027 aims to help absorb economic shocks and address regional and international headwinds efficiently.
He said that the plan aims to achieve an economic growth rate of 5.4 per cent during the fiscal year 2026-2027 despite the Iran war, gradually rising to 6.8 per cent by the year 2029-2030.
Rostom said that the target is for LE3.8 trillion in total investments, LE1.5 trillion of which are public investments representing 41 per cent of spending, and LE2.2 trillion coming from the private sector, representing 59 per cent of spending, which reflects the state’s aim to boost the private sector’s contribution to the national economy.
He said that 48 per cent of the investments will go to the sectors of education, healthcare, youth, and cultural services.
* A version of this article appears in print in the 2 April, 2026 edition of Al-Ahram Weekly.
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