Cabinet approves FY 25-26 budget: The Madbouly cabinet greenlit the draft budget for the fiscal year 2025-2026, giving us our first official look into the year’s state budget.

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Among the highlights: The state is targeting a primary surplus of EGP 795 bn — or 4% of GDP — and reducing the public debt to 82.9% next fiscal year, as well as trimming the debt-to-GDP ratio to below 92%.

Revenues and expenses on the rise: Next year’s budget pencils a 19% y-o-y jump in revenues to EGP 3.1 tn and a 18% y-o-y rise in expenses to EGP 4.6 tn. The budget sees increased spending on education, healthcare, social protection, and support to export-oriented sectors.

A big chunk of the spending allocations will go towards social support — the state has allocated EGP 732.6 bn (up 15.2%) to social security. The state plans to spend EGP 160 bn (up 20%) on commodity subsidies, EGP 75 bn on fuel subsidies, and another EGP 75 bn on electricity subsidies.

And to support industry: The budget allocates EGP 78.1 bn to support productive, export-oriented, and tourism activities — the figure is 3x the amount usually dedicated to support such activities. The budget earmarks EGP 8.3 bn to support the tourism sector, EGP 5 bn to support priority industries, and between EGP 3-5 bn in cash incentives to MSMEs.

As for healthcare: The state will spend EGP 22 bn on medicine, EGP 12.4 bn on pharma raw materials, EGP 11 bn on medical supplies, and EGP 15.1 bn to provide treatment for those who cannot afford it.

That’s not all: Some EGP 679.1 bn will go to the salaries of public sector employees, marking a 18.1% y-o-y increase.

REMEMBER- A package of wage and pension hikes is expected to take effect starting the new fiscal year — civil servants and workers at state-owned enterprises will see salary increases and a hike to the minimum wage to EGP 7k and pension payouts will see a 15% jump.

What about the figures for the General Government Budget: Next fiscal year’s GeneralGovernment Budget — which takes into account the budgets of all the state’s economic bodies in addition to the state budget — pencils in EGP 7.2 tn in revenues and EGP 8.5 tn.

WANT THE FULL PICTURE? We have a dive into what can be expected from next fiscal year’s budget, which you can check out here.

What’s next? The draft budget will now go to the House of Representatives for discussion.

The international press took note of the news: Reuters | Bloomberg.

ALSO APPROVED BY THE CABINET-

The cabinet approved a long list of decisions during its weekly meeting yesterday, among those worth noting:

#1- A contract between the National Egyptian Railway Industries Company and National Authority for Tunnels to manufacture and supply rolling stock for Alexandria’s Abu Qir – Misr Station metro. The contract will span two phases, the first 38-month phase includes the manufacturing and supplying 21 trains, their maintenance, and the driver training simulator, and the second 8-year phase includes the maintenance and supply of spare parts.

#2- A contract between Egyptian National Railways and US railway components supplier ProgressRail to refurbish 100 diesel-electric locomotives, and provide spare parts for 141 locomotives over 15 years. The US player will also offer technical support services for 10 years.

#3- Alstom’s EUR 80 mn manufacturing complex in Borg Al Arab, which will include a plant to produce electrical systems and railway components and another to produce units for the metro, monorail, high-speed train, and LRT. The French rolling stock company awarded Rowad Modern Engineering the contract to construct the complex last this week.

#4- Draft presidential decrees to establish seven new national universities across Egypt, as part of the state’s plan to increase the total number of national universities to 32 nationwide. The seven new universities will be set up in Sohag, Kafr El Sheikh, new capital, 6th of October, Beheira, Suez, and New Valley.

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