{"id":663871,"date":"2025-04-16T00:00:00","date_gmt":"2025-04-16T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2025\/04\/16\/next-fiscal-years-government-budget-pencils-in-23-0-jump-in-revenues-19-2-rise-in-expenditures\/"},"modified":"2025-04-16T00:00:00","modified_gmt":"2025-04-16T00:00:00","slug":"next-fiscal-years-government-budget-pencils-in-23-0-jump-in-revenues-19-2-rise-in-expenditures","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2025\/04\/16\/next-fiscal-years-government-budget-pencils-in-23-0-jump-in-revenues-19-2-rise-in-expenditures\/","title":{"rendered":"Next fiscal year\u2019s government budget pencils in 23.0% jump in revenues, 19.2% rise in expenditures"},"content":{"rendered":"

Finance <\/strong>Minister Ahmed Kouchouk delivered his budget statement to the House <\/strong>yesterday<\/strong>, giving us the first proper look at the draft state and public government budgets for the next fiscal year.<\/p>\n

The key takeaways: <\/strong>The Finance Ministry sees growth accelerating, the primary budget surplus rising fractionally, and the deficit inching down. It\u2019s going to spend more on debt service, subsidies, and export incentives. We have a detailed rundown below. <\/p>\n

IN CONTEXT-<\/strong> The government last year amended<\/a> the Unified Budget Act to allow for the budgets of all 59 of the state\u2019s economic bodies and the state budget to be presented in the General Government Budget \u2014 a consolidated budget to help improve the state\u2019s financial indicators by accounting for the entirety of the state\u2019s revenues. This year\u2019s General Government Budget includes the budgets of 40 different entities, with the government planning to incorporate the budgets of other units into the budget over a five-year period.<\/p>\n

MACRO OBJECTIVES-<\/p>\n

Egypt\u2019s real GDP growth is expected to accelerate to 4.5% in the coming fiscal year<\/strong>, up from an estimated 4.0% in FY 2024-25 and in line with recent government forecasts<\/a>. The government is basing its outlook on a targeted average inflation rate of 13.0%, down from the current budget\u2019s average of 19.5%. The country\u2019s total GDP is set to reach EGP 20.4 tn, up from EGP 17.2 tn in the current fiscal year. A government source confirmed to EnterpriseAM that the draft budget was priced at USD at EGP 50.<\/p>\n

The gov\u2019t sees the primary surplus reaching 4<\/strong>.0% o<\/strong>f GDP, <\/strong>up from 3.5% projected for the current fiscal year. Alongside this the deficit is expected to decrease from 7.6% of GDP estimated for this fiscal year to 7.3% of GDP in FY 2025-26, before falling further to 5.5% of GDP in FY 2026-27. The government aims to bring down the debt-to-GDP ratio to 80% by the end of June 2026 and to lower external debt by USD 1\u22122 bn annually, Kouchouk said.<\/p>\n

Revenues and expenses are both forecasted to rise<\/strong>, with next year\u2019s budget pencilling in a 23.0% y-o-y jump in public revenues to EGP 3.1 tn and a 19.2% y-o-y rise in expenses to EGP 4.6 tn.<\/p>\n

Healthcare and education spending is getting a boost<\/strong>, with the draft budget allocating EGP 617.9 bn to the healthcare sector, including a 50% increase in allocations for state-funded treatment. The government also allocated EGP 684.8 bn for pre-university education, EGP 358.3 bn for higher education, and EGP 173 bn for scientific research. This is up from last year\u2019s budget, wherein the government allocated a total of EGP 858 bn for education as a whole.<\/p>\n

The gov\u2019t also recently lowered its price expectations for oil prices, <\/strong>forecasting<\/a> Brent crude prices averaging USD 77 per barrel from July 2025 through June 2026, down from its previous forecast of USD 82 a barrel in the FY 2024-25 budget, a government source told EnterpriseAM last week. The estimated price could be higher than actual oil price levels during the year, our source suggested, saying that indicators are pointing towards a global dip in oil prices at large. <\/p>\n

But other important commodities like wheat are expected to rise. <\/strong>The government is expecting wheat prices through the 12-month period to average at USD 280 a ton \u2014 up from USD 240 estimated for the current fiscal year<\/a>.<\/p>\n

MONEY IN, MONEY OUT-<\/p>\n

The Madbouly government is aiming to raise some EG<\/strong>P 2.6 t<\/strong>n in tax revenues in the <\/strong>upcoming fiscal year<\/strong> through implementing existing tax facilitation laws and introducing new facilities on customs and real estate taxation \u2014 all without imposing additional tax burdens, Kouchouk said.<\/p>\n

Taxes on goods and services will make up the bulk of total tax revenues<\/strong> with some EGP 1.1 tn, followed by income taxes with EGP 915.7 bn. Taxes on yields on treasury bills and bonds will come in at EGP 322.1 bn, while customs will make up EGP 135.7 bn of total revenues. Finally, real estate taxes will account for EGP 18.0 bn, with other taxes making up the remaining EGP 122.9 bn. <\/p>\n

The tax policy for the upcoming fiscal year has a number of objectives. <\/strong>The main aims of the government\u2019s tax policy for the year include making progress in implementing the package of customs facilitation, the implementation of real estate tax reforms, broadening the tax base with minimal impact on inflation rates, as well as continuing the implementation of tax facilitation measures and ensuring they achieve their intended purposes and targets.<\/p>\n

Interest spending is set to make up the majority of the government\u2019s total expenses<\/strong> with some 50.2% of its total spending (EGP 2.3 tn), with subsidies coming in second place with 16.2% (EGP 742.5 bn). This is followed by wage payments (14.8%) with EGP 679.1 bn allocated.<\/p>\n

As for subsidy spending:<\/strong><\/p>\n