Egypt’s FY2025/26 budget in 12 easy points

As Egypt enters fiscal year 2025/26, the government lays out an ambitious budget centered on boosting efficiency, supporting private sector growth, and tightening financial discipline. Here's a breakdown of the key highlights:

1. Egypt sets total spending above EGP 4.5 trillion

The fiscal year kicks off with a projected total expenditure exceeding EGP 4.5 trillion, signaling continued investment in public services, infrastructure, and social protection.

2. Revenue forecast rises by 23 percent

The state expects total revenues to grow to EGP 3.1 trillion—up from EGP 2.5 trillion in FY2024/25—driven largely by improved tax collection and digital reforms.

3. Egypt targets a primary surplus of 4 percent of GDP

The government aims to achieve a primary surplus equivalent to 4 percent of GDP while reducing the overall budget deficit to 7.3 percent, reflecting a modest improvement from the previous year’s estimated 7.6 percent.

4. No new taxes, but tax base expansion planned

Rather than raising tax rates, Egypt plans to increase compliance and modernize its tax infrastructure—through digital tools, real-time monitoring, and better enforcement—to grow revenues.

5. Income tax revenue set to rise nearly 23 percent

Income tax collections are projected to reach EGP 1.441 trillion, reflecting a 22.9 percent year-on-year increase. This includes taxes from wages, business profits, and treasury yields.

6. VAT and customs expected to grow on digital reforms

VAT revenues are forecast to rise by 20.8 percent to nearly EGP 968 billion, supported by digital invoicing systems. Customs duties are also projected to increase 14.7 percent to EGP 136 billion.

7. Non-tax revenues to play a bigger role

The government plans to better leverage state-owned assets and reduce borrowing by improving returns on public investments, enhancing efficiency, and cutting waste.

8. Public investment to increase by over 12 percent

Total public investments are set to rise 12.7 percent to EGP 435 billion, with treasury-funded investments seeing a 25 percent boost. Priorities include infrastructure and development-enabling sectors.

9. Spending to focus on services and inclusion

The budget prioritizes funding for education, healthcare, and social protection, alongside programs targeting youth employment, vocational training, and small business development.

10. Capital expenditure to support private sector role

Capital spending is expected to grow 13 percent, aimed at fostering a more competitive investment climate and encouraging private-sector-led economic growth.

11. Debt ratio expected to decline to 90 percent of GDP

Efforts to manage domestic debt costs are expected to bring Egypt’s debt-to-GDP ratio to 90 percent, signaling a modest improvement in fiscal sustainability.

12. Inflation targeted to fall below 14 percent

The government projects inflation to decrease to 13.6 percent this fiscal year, with a longer-term goal of reaching 9 percent by FY2028/29—though near-term targets remain out of reach.