The minister stated that the government sets out an ambitious fiscal plan aimed at boosting investment, strengthening public finances, and expanding social protection.
Deficit reduction and debt strategy
Kouchouk said the new budget is built on expectations of easing inflation to around 9.3 percent, alongside continued efforts to narrow the fiscal deficit and reduce public debt. The overall deficit is projected to decline to 4.9 percent of GDP in the FY2026/2027, down from an estimated 6.1 percent in the current fiscal year, which ends on 30 June 2026.
The budget assumes an average oil price of about $75 per barrel, with energy subsidies expected to fall to around EGP 120 billion in the coming fiscal year.
On public debt, the minister said the government aims to reduce the debt of budget sector entities to 78 percent of GDP by June 2027, while continuing to bring down external debt by $1–2 billion annually. External debt has already declined to approximately $77.5 billion from $78.5 billion, he added. The strategy also targets lowering debt servicing costs to 35 percent of total expenditure over the medium term.
The government is also aiming to generate a primary surplus of 5 percent of GDP in the upcoming budget, compared to nearly 3.5 percent recorded in the first nine months of the current fiscal year, equivalent to about EGP 750 billion.
Revenues and tax reforms
Kouchouk said total revenues are projected to reach EGP 4 trillion in FY2026/2027, marking a 27.6 percent increase, driven largely by a 27 percent rise in tax revenues. The government plans to expand the tax base by attracting new taxpayers without imposing additional burdens, to include 100,000 new taxpayers under a simplified system.
He added that efforts to simplify tax procedures will continue, alongside the rollout of enhanced tax services and incentives for compliant taxpayers.
Spending priorities: Health and education
Expenditures are expected to rise to EGP 5.1 trillion, up 13.2 percent, with the budget prioritising human development sectors. Allocations for health and education will increase by 30 percent and 20 percent, respectively, outpacing overall spending growth.
In the health sector, EGP 90.5 billion has been earmarked for the Unified Procurement Authority to secure medicines and medical supplies, while EGP 47.5 billion will be directed toward state-funded treatment, health insurance, and pharmaceuticals. Additional funds have also been set aside to support the rollout of the universal health insurance system in Minya.
Education spending includes EGP 7.8 billion for printing pre-university textbooks and EGP 7 billion for school nutrition programmes, alongside increased investments in infrastructure development and maintenance nationwide.
Supporting growth and the private sector
To support economic activity, the government has allocated EGP 90 billion for production, manufacturing, and export promotion, including EGP 48 billion for export subsidies. Additional allocations include EGP 6.7 billion for tourism development, EGP 6 billion in financing facilities for productive sectors, and targeted incentives for small and medium-sized enterprises (SMEs) and priority industries.
Kouchouk described private sector participation as a “key pillar” for achieving sustainable growth that translates into improved living standards.
Wages and public sector incentives
The minister confirmed that salary increases for public sector employees have been factored into the new budget and will take effect in July. The wage bill is set to rise to EGP 821 billion, following increases exceeding EGP 100 billion, with a 21 percent annual growth rate aimed at delivering real income gains above inflation. The minimum monthly wage will be raised to EGP 8,000.
The increases include a 12 percent annual raise for employees covered by the civil service law and 15 percent for others, along with an additional EGP 750 monthly incentive for all workers. Teachers and healthcare workers will receive further targeted incentives, benefiting around one million teachers and 640,000 medical staff.
Social protection measures
The budget allocates EGP 832.3 billion for subsidies and social protection programmes, up 12 percent year-on-year. This includes EGP 175.3 billion for food subsidies benefiting more than 60 million citizens, and EGP 55.3 billion for cash transfer programmes such as Takaful and Karama, which support over 4.7 million families.
Electricity subsidies will reach EGP 104.2 billion, while EGP 13 billion has been set aside to support housing for low- and middle-income groups. An additional EGP 4.6 billion will go to urban development initiatives aimed at upgrading informal areas.
Outlook and government IPOs
Kouchouk said the government has increased budgetary reserves to better manage risks stemming from ongoing regional challenges, stressing that the fiscal plan is designed to balance reform efforts with social protection.
He also noted that the government aims to proceed with three state offerings before the end of the current fiscal year, as part of its broader strategy to enhance private sector engagement and attract investment.
An Egyptian high-level delegation is anticipated to head to Washington DC this week to participate in the spring meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) to discuss the measures Egypt will implement under the remaining two reviews of the outstanding $8 billion Extended Fund Facility (EFF) loan programme.
The EFF programme is scheduled to conclude by 15 December 2026.
The delegation includes Minister of Foreign Affairs and International Cooperation Badr Abdelatty as Egypt Governor at the World Bank; Central Bank of Egypt (CBE) governor Hassan Abdalla as Egypt Governor at the IMF; and Kouchouk as Egypt sub-governor at the IMF.
Short link: