Egypt budget initial surplus jumps over 8.5 fold in 1st 9 months of FY2023/2024: Finance minister

Doaa A.Moneim , Tuesday 9 Apr 2024

The budget initial surplus has jumped over 8.5 folds during the first nine months of the current fiscal year (FY) 2023/2024 to EGP 416 billion (three percent of GDP), compared to EGP 50 billion (0.5 percent of GDP) in the same period of FY2022/2023, Minister of Finance Mohamed Maait announced on Monday.

File Photo: Minister of Finance Mohamed Maait speaks during an open dialogue on the new FY2024/2025 budget


Minister Maait added that the Ras El-Hekma deal, signed by Egypt with UAE’s ADQ in February, brought EGP 179 billion to the state’s General Treasury, approximately 1.3 percent of Egypt’s GDP.

UAE has deposited $11 billion, out of the project’s total $35 billion financing, at the Central Bank of Egypt (CBE) for investing in the project.

The total general state revenues during the past nine months have increased by 57.1 percent to over EGP 1.45 trillion, compared to the corresponding period in FY2022/2023, but only 38 percent if Ras El-Hekma proceeds are excluded, according to Maait. 

Non-tax revenues also increased by 122.9 percent, and tax revenues increased to over EGP 1 trillion, or 41.2 percent of the GDP, as a result of digitization efforts and tax base expansion, without imposing any new burdens on citizens or investors during the period from July 2023 to March 2024, compared to FY2022/2023, he explained.

Non-sovereign tax revenues grew by 32 percent and sovereign tax revenues by 83 percent, Maait added.

Moreover, he said that general state expenditures increased to EGP 2.3 trillion, an annual growth rate of 50.8 percent, during the past nine months, resulting from the significant rise in interest rates and increased spending on support, social protection, and wages.

“This comes within the framework of the government's commitment to dealing quickly with the negative repercussions of global crises and mitigating their impact on citizens while continuing to build the Egyptian human capital by focusing on health and education as its main pillars,” Maait stated.

Egypt targets reducing the debt service bill to 30 percent of general expenditures over the medium term, as part of its integrated strategy to decrease the debt ratio by 80 percent till June 2027, Maait noted.

The government has managed to maintain the overall deficit rate at 5.42 percent of the GDP, compared to 5.40 percent for the same period last year, despite the massive negative impact of global crises and rising interest rates, he clarified.

“We have also maintained the stability of the debt portfolio maturity despite the severity of global economic challenges and increasing investor uncertainty worldwide. We aim to achieve a debt portfolio maturity of 3.3 years by the end of June 2024 to alleviate the financing needs of the general budget,” the minister said.

Despite the intensity of shocks on the economy, the education sector's needs have been provided during the past nine months with a value of EGP 180 billion, and the health sector with a value of EGP 125 billion, Maait explained.

He also highlighted the 33.9 percent increase in actual spending on support, grants, and social benefits to alleviate inflationary burdens on low- and middle-income households.

Maait noted that the state’s General Treasury had paid EGP 135 billion in dues to the Social Insurance and Pensions Fund, EGP 69 billion for the support of subsidized goods, and EGP 24 billion for the "Dignity and Solidarity" programme, with a growth rate of 44 percent compared to the same period of the previous year.

Meanwhile, actual wage expenditures have increased by 74.6 percent to accommodate the exceptional social packages designated to ease the burdens on state employees.

Additionally, investments funded by the General Treasury have decreased by 19 percent, as part of the state's efforts to create room for the private sector to lead the development and economic activity and provide one million job opportunities annually, Maait continued.

Maait emphasized that the new path for the Egyptian economy, which is based on structural reforms supporting the recovery process, relies on the private sector to lead growth, stability, and economic development while attracting more domestic and foreign investment flows.

This new path has started to bear fruits as the financial performance from July 2023 to late March exceeded the budget estimates and targets despite the harsh economic crises amid regional and international geopolitical tensions, Maait concluded.

Short link: