Egypt excludes several sectors from spending rationalization plan: Maait

Ahram Online , Sunday 17 Dec 2023

The Egyptian government's decision to rationalize spending will not affect crucial sectors such as health, supply goods, petroleum and gas supplies, as well as the solidarity and dignity initiative, said Minister of Finance Mohamed Maait, according to a statement on Saturday.

Finance Minister Mohamed Mait (Al-Ahram)

The rationalization of public spending is an integral component of the International Monetary Fund's (IMF) $3 billion loan agreement with the country.

These measures aim to enhance the efficiency of government spending and address the economic challenges faced by Egypt, the minister added.

The finance minister revealed that the budget for subsidies and social protection has increased by 48.8 percent to EGP 529.7 billion for FY2023/2024, compared to EGP 358.4 billion in the previous FY.

According to the draft of Egypt's general budget for FY2023/2024, the budget deficit is projected to reach EGP 848.8 billion, up from EGP 718 billion in FY2022/2023.

Despite the increase, the Egyptian government aims to manage the deficit and expects it to remain at 6.9 percent of the GDP for the current fiscal year, demonstrating a commitment to fiscal stability.

Prioritizing local production

Maait also explained that one of Egypt’s key strategies is the prioritization of local products in government contracts, even if their prices exceed those of foreign counterparts by up to 15 percent, which aligns with the country's efforts to boost local production and promote the localization of industries, Maait added.

“By supporting domestic products, the government aims to stimulate economic growth and enhance competitiveness,” Maait further mentioned.

Maait emphasized the importance of attracting private sector investment in sectors aligned with developmental priorities and global competitiveness, though encouraging increased private sector involvement, the government seeks to create new opportunities for exports and facilitate access to international markets.