Egypt allocates EGP 150 bln for petroleum subsidies in FY25/26

Minister of Finance Ahmed Kouchouk said this before the parliament members, announcing that FY2025/2026 will start on 1 July 2025.

The upcoming fiscal year's allocations for petroleum subsidies are lower than those of the current FY2024/2025, which witnessed only EGP 154.4 billion.

However, this contradicts the minister's announcement in March that the government will cut these subsidies by 51.4 percent to slightly over EGP 71 billion in FY2025/2026.

According to Kouchouk, the new budget allocations include EGP 742.5 billion for social protection, reflecting a 16.8 percent annual growth.

Key social allocations include the following:

- Subsidized Goods: EGP 160 billion to ease financial burdens on citizens, with a 19 percent annual growth rate;

- Social Security Programmes: EGP 54 billion for "Takaful and Karama," marking a 35 percent increase;

- Healthcare for Low-Income Citizens: EGP 15.1 billion for treatment at the state's expense, with a 50 percent annual growth rate;

- Sewage and Sanitation: EGP 27 billion for other service expenses, representing a 35 percent increase;

- Pension Funds: EGP 227 billion in contributions to support retirees;

- Housing Support: EGP 13.6 billion for low-income families, with an annual growth rate of 14.3 percent;

- Natural Gas Access: EGP 3.5 billion for expanding connection to homes, benefiting urban and rural areas;

- Transportation Improvements: EGP 5.2 billion for railways, EGP 1.8 billion for student and metro subscriptions, and EGP 2.5 billion for passenger services in Cairo and Alexandria.

Furthermore, the minister indicated that the budget statement also includes significant figures related to Egypt's business community.

Egypt is committed, under its $8 billion Extended Fund Facility with the International Monetary Fund (IMF), to raising the private sector's share in the national economy and unleashing its potential to lead the country’s economic growth.

Key business community allocations include the following:

- EGP 78 billion for industrial and export activities (largest support);
 
- EGP 8.4 billion for supporting tourism investment and increasing hotel capacity;

- EGP 44.5 billion to boost exports, with a 93 percent annual growth rate, and a new ambitious programme for exporters;

- EGP 29.6 billion for industrial production, reflecting a 69 percent increase over the current budget;
 
- EGP 5 billion for supporting priority industries to enhance production capacity from machinery and equipment;

- EGP 5 billion in cash incentives allocated for medium, small, and micro enterprises (SMEs);

- EGP 3 billion for supporting the automotive industry and its components in Egypt;

- EGP 3 billion for initiatives to transition to more efficient energy sources.