Finance Minister Ahmed Kouchouk is building a rainy-day buffer as he prepares the upcoming state budget, signaling a hard pivot toward fiscal preservation over expansion. Kouchouk’s remarks during a panel hosted by the National Front Party last week (watch, runtime: 10:44) confirm that the government will max out its emergency budget reserves to the constitutional limit of 5% — up from 3% — while freezing or delaying all non-essential public spending.

By the numbers: The contingency reserve in the current fiscal year’s budget stands at around EGP 140 bn, or roughly 3% of total spending. About 60% of this reserve has not been used so far, according to Kouchouk, but if the regional war drags on, the government may resort to tapping the contingency allocations in the coming months.

Why it matters: By hitting the legislative ceiling on reserves, Kouchouk is building a liquidity moat to protect energy and food subsidies against global volatility. Energy and food security are prioritized, supported by expedited renewable energy projects and robust infrastructure to receive necessary LNG imports.

Multiple indicators suggest the government is moving quickly on several fronts to secure essential commodities and concessional financing early. During the same panel, Supply Minister Sherif Farouk said (watch, runtime: 6:26) the strategic reserve of key goods remains at safe levels, noting a major expansion in grain storage infrastructure after wheat storage capacity was increased to 3.4 mn tons — up from 1.6 mn tons — with a target of reaching 6 mn tons. The push comes as Farouk met with officials from Ferum Egypt last week to follow up on the implementation of a project to localize the manufacturing of grain storage silos in Egypt.

The state continues to shoulder the high cost of bread subsidies, which exceeded EGP 165 bn in the previous budget and are expected to surpass that level in the upcoming budget to keep the price of subsidized bread stable, Farouk said.

The government is prepared to import additional LNG shipments if necessary to ensure electricity generation and industrial demand are met and domestic production is shielded from potential supply disruptions, Oil Minister Karim Badawi said during the panel (watch, runtime: 11:02).

What’s next? The Cabinet is expected to approve the next FY’s budget before the Eid El Fitr holiday, a government source tells EnterpriseAM. The government will finalize the draft budget once it decides on raising the minimum wage and increasing allocations for subsidized essential goods, before submitting the draft to parliament for discussion before the end of March, the source added.

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