Egypt’s FY2021/2022 budget plan targets decreasing the overall deficit to GDP ratio to 6.6 percent as well as reaching a 1.5 percent initial surplus, Minister of Finance Mohamed Maait said.

Maait made his statements during reviewing the coming FY2021/2022 budget plan, which was approved by the cabinet in its weekly meeting held on Wednesday.

Maait also said that in light of the expected gradual economic recovery from the pandemic and the reforms Egypt has executed so far, the budget’s revenues are expected to increase by 16.4 percent to post EGP 1.3 trillion during FY2021/22, up from EGP 1.1 trillion in the current FY2020/21, which ends in June.

Such an increase will be reached through expanding the tax base and the e-payment and collecting system as well as linking the revenues with economic activity, according to Maait.

For public investments, Maait unveiled that they will witness an unprecedented increase in the FY2021/22 budget, with a growth rate of 27.6 percent.

Moreover, exports support and development is expected to grow to 110 percent, wages and compensations to 11.4 percent, while raw materials allocations will increase by 26 percent, according to Maait.

The FY2021/22 budget will continue to bear the financial burdens caused by the decrease in electricity and natural gas prices with a total cost worth EGP 9 billion, up to EGP 10 billion according to the actual consumption, said Maait.

It will also allocate EGP 2.1 billion for the first year of applying the national project of converting the oil-run vehicles to hybrid-power ones, which targets converting between 50,000 and 70,000 vehicles, according to the minister.

Concerning social protection, Maait clarified that FY2021/22 targets raising wages and rewards by EGP 37 billion as well as allocating EGP 1.5 billion for the employees who will move to the New Administrative Capital as bonuses and relocation allowances.

The FY2021/22 budget also allocates EGP 87.8 billion for supporting the supply of goods, up from EGP 83 billion in the current FY2020/21, in addition to financing the “Takafol and Karama” programme with EGP 20 billion, which allows providing 3.6 million low-income families with monthly cash support, Maait explained.

The minister affirmed that the FY2021/22 budget will continue its efforts to promote financial stability in light of the ongoing COVID-19 crisis and its related repercussions and will resume supporting economic activity without prejudice to the debt and budget indices’ stability.

Furthermore, the FY2021/22 budget will continue to back the productive sectors and the most-hit classes by the pandemic, alongside improving the quality of infrastructure, services, and utilities, as well as uplifting the quality of public spending, said Maait.

Additionally, the FY2021/22 budget targets growing its revenues in rates faster and higher than the annual expenses growth rate for the sake of narrowing the gap between the expenses and revenues, according to the minister.