Gov’t targets fiscal balance in EGP 5.1 tn FY 2026/27 budget

Finance Minister Ahmed Kouchouk presented the FY 2026/27 budget to the House of the Representatives yesterday, targeting EGP 4 tn in total revenue — up 29% y-o-y — and EGP 5.1 tn in expenditures, up almost 11%, and aligning with targets previously reported by EnterpriseAM. An overall deficit of 4.9%, down from 6.1%, is projected at the end of the current fiscal year.

“The government is addressing current and potential risks by increasing the size and share of general reserves,” Kouchouk told the House while delivering the financial statement. To hedge against volatility, contingency reserves have been nearly doubled to EGP 262.9 bn, representing 4.6% of total spending.

Significant portions are ring-fenced to cover emergency volatility, with EGP 73.6 bn earmarked for potential increases in wages and EGP 65.2 bn for energy costs. Central to the state’s de-risking strategy is a push to bring the debt-to-GDP ratio down by 3-4% to 78% by June 2027, while trimming external debt by USD 2 bn annually.

The wage bill is set to rise 21% to EGP 821 bn to support an EGP 8k minimum wage. Total subsidy and social protection allocations stand at EGP 832.3 bn.

On a wider level

The broader FY 2026/27 economic plan, also presented to the house yesterday, expects a 5.2% growth while adding an extra 0.2% under a “cautiously optimistic scenario.” Four key sectors — agriculture, industry, wholesale/retail trade, and construction — are slated to contribute approximately 62% of this expansion.

“There are [prospects] for the Egyptian economy in manufacturing and exports,” Planning Minister Ahmed Rostom told the House, saying the economy has shown resilience after “five consecutive shocks” in recent years.

The private sector is expected to contribute EGP 2.2 tn of EGP 3.7 tn penciled in for investments in the upcoming fiscal year. This amounts to 59% of the total investments, and less than that 63% projected in the current budget.