Egypt Budget Deficit Drops to 2.1% in Q1 FY2024/2025Source: www.export-egypt.com 11/6/2024, Location: Africa |
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Egypt's budget deficit dropped to 2.1 percent of the GDP in the first quarter (Q1) of the current fiscal year (FY) 2024/2025, down from 3.2 percent in FY2023/2024, Minister of Finance Ahmed Kouchouk announced .
Kouchouk made this announcement during a plenary session of the House of Representatives, marking the completion of his "100 days of work" as minister of finance. Egypt's FY2024/2025 budget deficit is projected to total EGP 1.245 trillion, representing 7.3 percent of the country's GDP. In addition, Kouchouk emphasized that public revenues grew by around 40 percent from July to September 2024. Key economic highlights Egypt's tax revenues saw a remarkable 45 percent annual growth, equivalent to 0.4 percent of GDP, marking the highest growth rate in over 20 years. Despite ongoing economic challenges, this growth was achieved without introducing additional burdens on taxpayers. The government reported a primary surplus of EGP 90 billion for Q1 of FY2024/2025, more than four times the surplus achieved during the previous fiscal years. This was achieved despite a significant 60 percent decline in revenues from the Suez Canal. Moreover, Kouchouk highlighted that the Ministry of Finance has been actively supporting key social initiatives. He added that the government delivered natural gas to nearly 1.2 million housing units, supported 330,000 social housing units for low-income families, and increased cash assistance for the Takaful and Karama programme to EGP 9.6 billion. Subsidies on food items also rose to EGP 26.1 billion in Q1, reflecting a 42.9 percent annual growth. Additionally, spending on subsidies and social benefits reached EGP 133 billion, an increase of 39.8 percent compared to the previous year. The government also increased its spending on education, which rose to EGP 77.5 billion, up from EGP 60.4 billion, with a growth rate of 28.4 percent. Healthcare spending also increased by 33 percent to EGP 46.5 billion, compared to EGP 34.9 billion in Q1 of FY2023/2024. Debt management and fiscal targets Egypt has made significant progress in managing public debt, Kouchouk noted. He further explained that the public debt-to-GDP ratio decreased from 96 percent in June 2023 to 89.6 percent in June 2024, with a target of 85 percent by the end of FY2024/2025. As part of its $8 billion loan agreement with the International Monetary Fund, Egypt aims to reduce its gross debt-to-GDP ratio to approximately 83 percent by FY2026/2027, setting this as one of its primary fiscal targets. Kouchouk also pointed out that external debt for budgetary sectors fell by over EGP 3 billion in the past year, and the government aims to reduce it by another EGP 2 billion by the end of FY2024/2025. |
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