Egypt’s parliament approved on June 24 the FY 2019/20 budget starting in July, with spending set at EGP 1.6 trn, up EGP 150 bn from the current fiscal year, marking the biggest state budget in the country’s history, Invest-Gate reports.

The new budget supports the country’s development sectors with around EGP 4.9 bn, including but not limited to EGP 3.9 bn for Egypt’s Social Housing Program, notably developing 120,000 housing units, and bolstering the enhancement of Upper Egypt, Finance Minister Mohamed Maait said in a recent ministerial statement. 

This comes besides rapid transit vehicles funding, facilitating the provision of grants and concessional financing, in addition to allocating EGP 6 bn to stimulate exports, Maait stated. He pointed out that public investment, financed by the General Treasury, is slated to hike 40% under the new budget to hit EGP 140 bn, compared to EGP 100 bn in the FY 2018/19 budget – the highest surge in investments in ten years. 

Moreover, the upcoming budget involves an unprecedented rise in sums directed to health and education sectors, logging EGP 326.8 bn in FY 2019/20 against EGP 257.7 bn in last year’s the budget, the minister elucidated, highlighting the state’s continuity in re-prioritizing public expenditures to record more financial savings in the medium term, thus allowing for increased spending on economic and social development projects to improve services provided to citizens.

Under the FY 2019/20 budget, an economic growth target of 6% is set from the 5.6% posted in the current fiscal year. However, it allocates EGP 52.96 bn for fuel subsidies, down from EGP 89.8 bn this year. 

In a letter to the International Monetary Fund (IMF) in January, Egypt said it would remove subsidies on most energy products by June 15 as part of a three-year, USD 12 bn loan program with the fund. So far, spending on fuel subsidies was slashed by almost 40%, to EGP 53 bn, while electricity subsidies are to drop further by 75% to EGP 4 bn. The subsidies have yet to be lifted and the government has not said when it will inflate prices.