Egypt Approves FY2025/2026 Draft Budget with Focus on Social Welfare, Economic Growth

CAIRO – 26 March 2025: The Egyptian Cabinet has approved the draft state budget for fiscal year 2025/2026 and agreed to refer it to the House of Representatives for parliamentary review. The proposed budget reflects the government's continued efforts to strike a balance between expanding social support and maintaining fiscal responsibility.

During the cabinet meeting, Minister of Finance Ahmed Kouchouk outlined the key features of the new budget. Projected revenues are expected to reach LE 3.1 trillion, marking an annual growth rate of 19 percent, while total expenditures are forecast at LE 4.6 trillion, an 18 percent increase compared to the previous year. The government also aims to achieve a primary surplus of LE 795 billion, equivalent to 4 percent of GDP, and reduce the debt-to-GDP ratio for general budget entities to 82.9 percent.

The budget meets the constitutional spending requirements on education, health, and scientific research, with LE 679.1 billion allocated to public sector wages, reflecting an 18.1 percent annual increase to cover salary adjustments effective July 1, 2025.

The healthcare sector receives a significant funding boost, with LE 22 billion allocated for medicines, LE 12.4 billion for raw materials, LE 11 billion for medical supplies, LE 2.8 billion for equipment maintenance, and LE 5 billion for therapeutic drugs and baby formula. The budget also designates LE 15.1 billion to cover medical treatment for uninsured low-income citizens, and LE 5.9 billion for health insurance targeting students, women who are primary caregivers, and children under the comprehensive health insurance scheme.

To ease the financial burden on vulnerable groups, the government has allocated LE 732.6 billion for subsidies, grants, and social benefits, a 15.2 percent increase over the previous year. This includes LE 160 billion to support food subsidy programs like bread and ration cards, reflecting a 20 percent annual growth. The “Takaful and Karama” social protection program will see a 35 percent budget increase, bringing total allocations to LE 54 billion, with monthly cash assistance set to rise by 25 percent beginning April 2025.

Energy subsidies remain a major component, with LE 75 billion allocated for petroleum support and an additional LE 75 billion for electricity subsidies. Another LE 3.5 billion will be used to connect households to natural gas networks.

The state treasury's contribution to pension funds will increase to LE 227.1 billion, while transport subsidies include LE 5.2 billion for Egyptian National Railways, LE 1.8 billion for student transit, and LE 2.5 billion for public transport systems in Cairo and Alexandria.

To support economic growth and investor confidence, the budget allocates LE 78.1 billion for productive, export-driven, and tourism-related sectors—three times more than in previous years. This includes LE 8.3 billion to boost the tourism sector, LE 5 billion for high-priority industrial activities, and LE 3 billion to support the transition to natural gas-powered vehicles. Small and medium-sized enterprises (SMEs) will benefit from LE 3 to 5 billion in financial incentives, and LE 1 billion has been allocated for an initiative to provide natural gas-powered taxis and light transport vehicles to young entrepreneurs.

Kouchouk concluded by stating that the consolidated government budget, which includes both the state and economic authorities, projects LE 7.2 trillion in revenues and LE 8.5 trillion in expenditures. The overarching fiscal strategy aims to raise the government’s primary surplus and reduce the overall debt-to-GDP ratio to below 92 percent, reaffirming Egypt’s commitment to economic stability and sustainable development.