Egypt achieves record primary surplus of $18.14bn in fiscal year 2023/24

Egypt’s budget recorded a preliminary surplus of 875 billion Egyptian pounds ($18.14 billion) for the fiscal year 2023/2024, compared to 164 billion during the previous period, a top official revealed.

During a Cabinet meeting chaired by Egypt’s Prime Minister Mostafa Madbouly, Minister of Finance Ahmed Kouchouk highlighted that this improvement came despite economic activity shocks.

The North African country’s economy has witnessed blows over the last year due to the ongoing crisis in Gaza, which has slowed tourism growth and cut into Suez Canal revenue, two of Egypt’s biggest sources of foreign currency.

To help alleviate the inflationary effects that have been burdening the Egyptian public, the government in April increased the amount of funding required in its 2024/2025 budget by over 2.8 trillion pounds ($59 billion).

Kouchouk stated that revenues represented an annual growth of about 59.3 percent during the fiscal year 2023/2024.

The budget also achieved a total deficit that was about 706 billion pounds lower than what was listed in the revised budget.

Kouchouk noted the reduction in the overall deficit in the general budget during 2023/2024, which amounted to about 505 billion Egyptian pounds, compared to a deficit of about 610 billion pounds in the previous fiscal year – a decrease of 17 percent.

Despite the deficit shrinking, there were sectors that exceeded their allocated budgets.

Education required around 256 billion pounds in funding, compared to around 230 billion pounds in the original budget.

Health sector needs totaled about 180 billion pounds, against an initial allocation of about 148 billion pounds.

The public treasury paid the Insurance and Pensions Fund’s dues, which amounted to 185 billion pounds, and settled all fees related to food subsidy support, amounting to 133 billion pounds, compared to about 128 billion pounds in the original budget.

He noted that this, alongside increasing wages and salaries of government employees and providing adequate allocations for various support items and social protection programs, contributed to an annual expenditure growth rate of 37.4 percent.

Kouchouk emphasized the continued efforts to improve the expenditure structure, which was generally achieved for all budget chapters, pointing out that the debt service bill remains high, and efforts are underway to reduce it.

The Minister of Finance reviewed the rates and developments regarding allocations for subsidies, grants, and social benefits, especially those related to supporting industrial production, export incentives, as well as social protection programs, and the health and education sectors.

Kouchouk also discussed the future budget estimates for the fiscal year 2024/2025, explaining that the Ministry of Finance aims to reduce the budget’s debt and place it on a downward trajectory.

Despite the difficulties the public treasury faced in the fiscal year 2023/2024 as a result of regional geopolitical unrest, high rates of inflation, and social programs put in place to protect citizens and pensioners, Kouchouk reiterated that the ministry was able to achieve strong financial performance by taking the required steps to mobilize revenues and control public finances.