Egypt Approves $91 Billion Budget for 2025/26

 The sun rises in Cairo, Egypt March 25, 2025. (Reuters)
The sun rises in Cairo, Egypt March 25, 2025. (Reuters)
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Egypt Approves $91 Billion Budget for 2025/26

 The sun rises in Cairo, Egypt March 25, 2025. (Reuters)
The sun rises in Cairo, Egypt March 25, 2025. (Reuters)

Egypt's cabinet approved a 4.6 trillion Egyptian pound ($91 billion) draft state budget for the financial year that will begin in July, a government statement said on Wednesday, as it continues to tighten its finances under an IMF program.

Expenditures will rise by 18% and revenue by 19% over the current 2024/25 budget. Revenue is expected to hit 3.1 trillion pounds, working out to a deficit of about 1.5 trillion pounds ($30 billion).

The increased expenditure partly reflects elevated headline inflation, which was running at an annual 12.8% in February.

Financial reforms under an $8 billion financial reform program signed in March 2024 with the International Monetary Fund have helped Egypt bring inflation down from a peak of 38% in September 2023.

The IMF this month approved the disbursement of $1.2 billion to Egypt after its fourth review of the program.

The new budget targets a primary surplus of 795 billion pounds, equal to 4% of GDP, up from the 3.5% primary surplus originally targeted in the 2024/25 budget.

The IMF granted the government a waiver in the fourth review after the surplus came in 0.5% of GDP lower than Egypt's earlier commitment.

In its third review in June, the IMF praised Egypt for its "strict control of spending".

The new budget also lowers public debt to 82.9% of GDP from an expected 92% in 2024/25, the cabinet statement said.

The cabinet said 732.6 billion pounds in spending in the new budget would be allocated for subsidies, grants and social benefits, an increase of 15.2%.

The budget increases commodities and bread subsidies by 20% to 160 billion pounds. It will also include 75 billion pounds to subsidize petroleum products, 75 billion pounds to subsidize electricity and 3.5 billion pounds to subsidize natural gas deliveries to households, the statement added.



Gold Falls as Positive US-China Talks Hamper Safe-haven Appeal

Gold jewelry are displayed for sale at V&P Jewelry in the St. Vincent Jewelry Center in the Jewelry District of Los Angeles in Los Angeles, Wednesday, April 30, 2025. (AP Photo/Jae C. Hong)
Gold jewelry are displayed for sale at V&P Jewelry in the St. Vincent Jewelry Center in the Jewelry District of Los Angeles in Los Angeles, Wednesday, April 30, 2025. (AP Photo/Jae C. Hong)
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Gold Falls as Positive US-China Talks Hamper Safe-haven Appeal

Gold jewelry are displayed for sale at V&P Jewelry in the St. Vincent Jewelry Center in the Jewelry District of Los Angeles in Los Angeles, Wednesday, April 30, 2025. (AP Photo/Jae C. Hong)
Gold jewelry are displayed for sale at V&P Jewelry in the St. Vincent Jewelry Center in the Jewelry District of Los Angeles in Los Angeles, Wednesday, April 30, 2025. (AP Photo/Jae C. Hong)

Gold slipped on Monday as positive US-China trade talks alleviated market fears, leading investors to shift from safe-haven assets towards riskier investments.

Spot gold fell 1.4% to $3,277.34 an ounce, as of 0432 GMT. US gold futures lost 1.9% to $3,281.70, Reuters reported.

"The dollar index has advanced as the Trump administration touted progress in trade negotiations, with China following negotiations over the weekend in Switzerland which weighed on gold prices," said Jigar Trivedi, senior commodity analyst at Reliance Securities.

The US and China ended high-stakes trade talks on a positive note on Sunday, with US officials touting a "deal" to reduce the US trade deficit, while Chinese officials said they had reached "important consensus".

Chinese Vice Premier He Lifeng said a joint statement would be released in Geneva on Monday.

The US and China imposed tit-for-tat tariffs on each other last month, triggering a trade war that fueled fears of global recession.

The US will be left with higher tariffs once the dust settles from President Donald Trump's trade negotiations, a majority of the current and former Trump advisers Reuters spoke to said.

Gold, traditionally seen as a hedge against economic and political uncertainties, thrives in a low-interest rate environment.

On Friday, Cleveland Fed President Beth Hammack said the Fed needs more time to see how the economy responds to Trump's tariffs and other policies before figuring out the right response.

Traders are also eyeing release of US Consumer Price Index on Tuesday for fresh signals on the Fed's monetary policy trajectory.

"In the near term, gold possibly continue to decline as the dollar could appreciate and amid reducing geopolitical risk the haven demand too may drop hence, the yellow metal may decline to $3,200/oz in the near term," Trivedi added.

Spot silver gained 0.4% to $32.84 an ounce, platinum rose 0.7% to $1,001.90 and palladium firmed 0.6% to $981.20.