Events in the region may cause the recently-greenlit state budget to undergo amendments — whether in terms of revenues, expenditures, or the projected deficit — as the escalations between Israel and Iran continue and the prospect of US intervention looms, a senior government source told EnterpriseAM. If this is the case, these amendments are expected to come in 2H 2025, or if necessary, before the end of the current parliamentary session in October, the source said.

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REMEMBER- The House approved on Tuesday the EGP 6.8 tn general state budget for FY 2025-2026, representing around a third of the country’s GDP, with EGP 4.6 tn allocated for expenditures, EGP 2.1 tn for local and foreign debt servicing, and EGP 102.8 bn worth of financial asset holdings.

A weaker EGP may push the state to open an additional appropriation in the budget to account for the rising cost of importing basic goods and production inputs, we were told. Alongside this, the budget may have to reassess its targets for revenue streams, including its EGP 2.6 tn target for taxes.

Regional escalations may also hinder Egypt’s plans to move forward with diversifying its public debt instruments, with the revenues from planned local sovereign sukuk issuances likely to be affected by an expected decline in investment from the region, our source said.

The Finance Ministry’s plan tolist 11 companies under the government’s privatizationprogram could also be pushed to 2Q 2025, if investor sentiment continues to take a hit from continuing escalations — especially for foreign investors. Movement in the exchange rate could also lead to the re-evaluation of companies included in the list, our source added.

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