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Monday, 26 December 2022

Our first look at the FY2023-2024 budget

FinMin pencils in 5.5% growth for FY2023-2024: Egypt is targeting a GDP growth of 5.5% in its draft budget for the next fiscal year, Finance Minister Mohamed Maait said in a statement. The government is also targeting a primary surplus of 2% for the upcoming fiscal year and a 5% budget deficit in the medium term. The target comes amid “exceptional circumstances” caused by a spike in the prices of goods and services, continued disruption of supply chains and a rising cost of financing, the statement reads.

Other targets: The ministry is hoping to bring down the debt-to-GDP ratio to below 80% by the end of 2027, revising the figure upward from the 72% target announced in October during the Egypt Economic Conference.

Where do we stand this fiscal year? The Planning Ministry recently revised downwards our economic growth expectation for FY2022-2023 to around 5% down from the 5.5% the Finance Ministry anticipated in the draft budget. The World Bank is expecting our economy to grow 4.5%, while the IMF and Fitch are both predicting a 4.4% growth tempered by inflation, a slowdown in public investments and a belated recovery from the tourism sector.

On the agenda for FY2023-2024: The draft budget prioritizes development, expanding social protection measures, overcoming the spillover effects from global economic challenges, and reducing the impact of the global inflationary wave on citizens, Maait said. The government also wants to expand the umbrella of the Decent Life (Hayah Karima) initiative to include the 60% of Egyptians who live in rural areas.

The news got attention internationally: Reuters.

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