Egypt revises up budget deficit estimate to 6.9% of GDP in FY2023/24

Maait attributed the revised figure to the interest rate hikes in Egypt and global markets, in addition to the increase in the social protection budget and the cost of basic commodities, including food and fuel.

Since the onset of the war in Ukraine, Egypt has been suffering soaring inflation, a shortage in hard currency and a decline in direct and indirect investments.

The finance minister stated in April that the budget for subsidies and social protection would increase by 48.8 percent to EGP 529.7 billion ($17.1 billion) in FY2023/2024 from EGP 358.4 billion ($11.6 billion) in FY2022/2023.

According to the draft of Egypt's general budget for FY2023/2024, the deficit is expected to reach EGP 848.8 billion ($27.4 billion), up from EGP 718 billion ($23.2 billion) in FY 2022/2023.

The draft shows that government spending is anticipated to increase by EGP 755 billion ($24.4 billion) to nearly EGP 3 trillion ($97 billion) in FY2023/2024, while revenue is expected to grow by EGP 624.2 billion ($20.2 billion) to EGP 2.1 trillion ($68 billion).

Egypt expects to attain a 4.1 percent real GDP growth in FY2023/2024 and a primary surplus of 2.5 percent of the GDP.

The World Bank has revised its forecasts for Egypt’s real GDP growth in FY2022/2023 and FY2023/2024 to four percent in both years, down from the 4.5 percent it projected in December of 2022.