After two days of heated discussions and sessions, the Egyptian Parliament finally approved the draft state general budget and the social and economic development plan for the fiscal year 2023/24.
The estimated value of uses in the fiscal year 2023/2024 budget is about EGP 4.349 trillion. While the estimated GDP amounted to about EGP 11.841 trillion.
The estimated value of the expenditures is about 2.991 trillion pounds distributed over 8 items in the budget, which is the first chapter, wages, which captures allocations estimated at about 470 billion pounds, and the second item relates to the purchase of goods and services, whose total financial allocations amount to about 139 billion pounds.
As for the third item, it relates to the interests of the public debt, whose allocations in the next budget amount to about EGP 1.120 trillion of total expenditures. With regard to the fourth item, allocations for support, grants, and social benefits, whose allocations amount to about 529 billion pounds.
The data indicates that the total government investment allocations amounted to about EGP 586.690 billion. The provision for Chapter 7 to acquire assets and financing imbalances for some economic bodies and public companies amounted to 42.376 billion pounds.
The allocation for Chapter 8, which deals with the payment of installments of domestic and foreign loans, amounted to about 1.316 trillion pounds. The value of taxes, grants, and other non-tax revenues for the fiscal year 2023/2024 amounted to EGP 2.142 trillion.
During the session, the Speaker of the House of Representatives called on the government to implement the recommendations he made, stressing that the specialized specific committees should follow up on the implementation of the recommendations.
According to the budget figures, government spending is set to increase by 34% on an annual basis in the fiscal year 2023/24, while debt service represents the largest single item of total spending.
In the context of countering inflation, the government also aims to increase spending on social protection and support programmes, as well as on wages, commodity purchases, social support, public investment, education and health. The government also targets a deficit of 824.44 billion pounds in the budget, at a rate of 6.96% in the next fiscal year, down from 8% expected during the current fiscal year.
During the session, Egyptian Finance Minister Mohamed Maait defended the budget before the deputies at the end of the debate sessions, pointing to the “extraordinary” global economic challenges that resulted from high inflation and the high interest rate environment in the wake of the Russian-Ukrainian war.
He said that interest rates on government borrowing have more than doubled to about 24 percent. He added, “We expect inflation and interest rates to decline at the end of this year,” stressing that the government will do its best to compensate society for this negative impact.
He pointed out that the executive regulations of the unified public finance law will be issued within weeks, after being reviewed by the International Monetary Fund and other bodies.
A document seen by Reuters on Tuesday showed that Egypt will allocate 127.7 billion Egyptian pounds ($4.14 billion) to the food subsidy program in the budget for the fiscal year.
2023-2024, which begins on July 1.
The Egyptian draft budget estimates the price of Brent crude at $80 per barrel, while Egypt expects 8.250 million tons of wheat for the subsidy program in 2023-2024.
The law, which was ratified last year, requires the government to submit an annual and medium-term financial strategy to parliament, and sets spending limits for each ministry. Maait explained that a ministerial committee is also working to support many losing government agencies, including the National Authority for Egyptian Railways, the National Media Authority and the National Authority for Tunnels, to turn them into profitability.