The Egyptian cabinet, led by Prime Minister Mostafa Madbouly, has approved the draft budget for the 2025/2026 fiscal year and referred it to Parliament for discussion and final approval. The new budget reflects record spending and a continued commitment to economic growth, social protection, and fiscal stability.
Finance Minister Ahmed Kouchouk outlined the budget’s key figures, noting that projected revenues will reach EGP 3.1trn, reflecting a 19% annual increase, while expenditures are set at EGP 4.6trn, marking an 18% rise. The government aims to achieve a primary surplus of EGP 795bn, equivalent to 4% of GDP, while working to reduce overall public debt to 82.9% of GDP.
A significant portion of the budget is dedicated to healthcare, education, and social protection, in line with presidential directives. Public sector wages will increase by 18.1% to EGP 679.1bn to accommodate salary raises starting in July. The healthcare sector will see notable allocations, including EGP 22bn for medicines, EGP 12.4bn for raw materials, EGP 11bn for medical supplies, and EGP 15.1bn for state-funded treatment for low-income citizens. The government has also allocated EGP 5.9bn for health insurance programs, covering students, female breadwinners, and beneficiaries of the Universal Health Insurance system. Overall social support spending is set to rise by 15.2% to EGP 732.6bn.
Food subsidies will increase by 20% to EGP 160bn, while the Takaful and Karama social security programme will see a 35% increase in funding, reaching EGP 54bn. Monthly cash support for beneficiaries will also rise by 25% starting in April. The government has allocated EGP 75bn for fuel subsidies and a similar amount for electricity subsidies, alongside EGP 3.5bn to expand household natural gas connections.
The budget also focuses on boosting economic productivity, with EGP 78.1bn allocated to support various sectors. Tourism will receive EGP 8.3bn, while priority industrial activities will be allocated EGP 5bn. An additional EGP 3bn will support the transition to natural gas-powered vehicles, while small and medium enterprises will benefit from EGP 5bn in cash incentives. A further EGP 1bn has been designated for a taxi and light truck financing initiative.
Economic growth is showing positive momentum, according to Minister of Planning and Economic Development Rania Al-Mashat. She reported that GDP growth reached 4.3% in the second quarter of the 2024/2025 fiscal year, up from 2.3% in the same period the previous year. The improvement was driven by growth in manufacturing, transportation, storage, and tourism. Exports also performed strongly, with semi-manufactured goods rising by 22.7% and total goods exports increasing by 18%.
Private sector investment expanded by 35.4% during the same period, now accounting for 53.3% of total investments, while public investment declined by 25.7% in line with the government’s strategy to boost private sector participation. Inflation also showed a notable decline, falling to 12.8% in February 2025 from 19.8% in February 2024, largely due to lower global commodity prices.
Egypt’s foreign direct investment (FDI) reached a net of $2.7bn in the first quarter of the 2024/2025 fiscal year, reflecting a 17% increase compared to the same period last year. Al-Mashat expressed optimism about Egypt’s economic trajectory, citing continued growth in non-oil manufacturing, tourism, and foreign investments, as well as improvements in Suez Canal revenues and remittances from Egyptians working abroad.
The 2025/2026 budget signals a strategic approach that balances fiscal responsibility with increased investment in key social and economic sectors, reinforcing Egypt’s commitment to long-term stability and sustainable development.
Reported by dailynewsegypt
