Minister of Finance, Mohamed Maait, revealed that reducing the GDP deficit to 6% during FY2022/2023 amidst global changes and continuous efforts to mitigate its negative effects demonstrated Egypt's strong management of public finances.

In a recent statement, the finance minister highlighted the positive financial performance indicators achieved during the 2022/2023 fiscal year despite the challenging global economic landscape.

Maait noted that rising prices of critical global commodities, fueled by disruptions in supply chains, led to unprecedented increases in fuel and food costs, with the EGP’s depreciation against the USD and market uncertainties and fluctuations posing substantial challenges. He also noted the higher cost of financing and difficulty in accessing international markets to bridge financing gaps.

Highlighting achievements in the fiscal year, the finance minister pointed towards an uptick in the primary surplus rate of GDP to 1.64%, totaling EGP 164.3 billion—up from FY 2021/2022’s 1.3% - despite an 18.9% increase in expenditures.

The Ministry of Finance allocated resources to support various sectors impacted by the conflict in Europe and slowed global economic growth, and was able to meet the needs of the health and education sectors, Maait added. He also addressed the rising costs of essential products in the local market, such as bread and petroleum, due to surging wheat and crude oil prices globally, highlighting that EGP 191 billion was provided to the National Social Insurance Organization to bring up pension support to EGP 701 billion in 4 years.

Investments funded by the public treasury increased by 16%, reaching EGP 230.3 billion, indicating the government's commitment to improving citizens' quality of life, the minister emphasized.

Subsidies for food commodities surged to EGP 121.8 billion, with wage and compensation increments totaling EGP 413.7 billion, supporting initiatives to enhance workers' income and welfare.

Allocations for subsidies and social benefits expanded to EGP 442.8 billion, reflecting a 29% increase, while funding for state-covered medical treatments rose by 22.9%. Subsidies for petroleum products surged by an impressive 93.5%, totaling EGP 116 billion.

Tax revenues saw a significant boost, driven by technological enhancements in tax administration, integration of the informal economy, and tax justice pursuits.

Related > Egyptian Tax Authority, Industries Union forge synergistic partnership to enhance tax integration

Suez Canal revenues also surged, reaching EGP 124 billion in FY 2022/2023 compared to the previous fiscal year’s recorded EGP 72.5 billion, Maait noted.

Egypt’s debt rate is projected to reach 95.6% of GDP by this fiscal year's end, with Maait citing external challenges including exchange rate fluctuations. The EGP’s devaluation led to an increase in Egypt’s debt by EGP 1.3 trillion, or 13.1% of the GDP, however, Maait emphasized Egypt’s aim to gradually reduce the debt rate from the current fiscal year onward, aiming to achieve a range from between 75-79% of the GDP over the next 4 years.