The Egyptian House of Representatives approved, on Tuesday, 17 June, the draft general state budget for the 2025/2026 fiscal year, following a debate session that saw objections from a number of independent and opposition MPs. Their criticism focused on what they described as an unprecedented rise in levels of debt and borrowing, against a decline in social spending and the absence of a clear economic vision.
The general budget is an annual document that sets the priorities of government spending and the sources of expected revenue during the fiscal year, and it covers areas such as health, education and defence. The government does not begin implementing it until after Parliament approves it, as it constitutes the economic, political and social plan of the state for the coming period.
According to the draft, which the government approved in March and referred to Parliament, public revenues are estimated at about EGP 3.1 trillion, at an annual growth rate of 19%. In contrast, expenditures rose to about EGP 4.6 trillion, an increase of 18% over the current fiscal year.
The new budget earmarked EGP 679.1 billion for the wages of employees of the state’s administrative apparatus, an increase of 18.1%, to cover the salary increases scheduled from next July. Appropriations were also allocated of about EGP 22 billion to subsidise medicines, EGP 12.4 billion for raw materials, EGP 11 billion for medical supplies, EGP 2.8 billion for the maintenance of medical equipment, and EGP 5 billion for therapeutic medicines and infant formula.
In contrast, petroleum product subsidies saw a sharp decline of 51%, falling from EGP 154 billion in the 2024/2025 budget to EGP 75 billion in the new year. The same amount, EGP 75 billion, was also allocated to electricity subsidies, alongside EGP 3.5 billion directed to projects connecting natural gas to homes.
According to Ministry of Finance estimates, the financing gap in the new budget is estimated at about EGP 3.6 trillion, equivalent to about USD 70 billion, based on the expected official exchange rate.
High Debt… and Declining Social Spending
During the plenary session held to discuss the draft general budget for the 2025/2026 fiscal year, a number of MPs announced their rejection of the draft, expressing their fears over the worsening of public debt, domestic and external, and the rise in the share of taxes to 85% of total revenues, against a marked decline in social spending and the continued absence of a clear economic vision that addresses chronic structural crises.
According to the official figures contained in the draft, about EGP 2,298 billion was allocated to paying interest on the debt and EGP 2,084.6 billion to its instalments, bringing total debt service allocations to EGP 4,382.6 billion, equivalent to 64.8% of total budget uses. In contrast, the government plans to obtain new loans worth EGP 3,575.6 billion, constituting 52.9% of total public resources.
For his part, MP Abdel Moneim Imam, member of the House of Representatives and head of the Al-Adl Party, affirms that the budget was approved according to the logic of majority and minority within Parliament, explaining that “the majority passed the budget as it came from the government, while the minority expressed the reasons for its rejection clearly and frankly”.
Speaking to Zawia3, Imam adds: “We rejected the budget because it is an extension of irrational economic policies that have been followed since Dr Mostafa Madbouly took over as head of the government. We are facing the continuation of an approach that lacks efficiency, reflected in the reduction of subsidy allocations and the swelling of public debt without real solutions to address the roots of the crisis.”
He explains that he made an intervention during the session in which he presented a precise comparison between the economic situation at the start of the Madbouly government’s tenure and where it has ended up today, noting that public revenues, excluding taxes and Suez Canal revenues, did not exceed EGP 455 billion, while a single real estate development company announced sales exceeding one trillion pounds.
Imam considers that this glaring disparity “reveals a fundamental flaw in the management of public resources”, pointing out that the Plan and Budget Committee received practical proposals from MPs to amend spending priorities and improve revenue efficiency, “but none of them was taken up”, in his words.
He warns against the continuation of the current policies amid worsening domestic and regional economic challenges, saying: “If performance continues in this way, we may face economic scenarios harsher than what we have witnessed in past years. We need a government characterised by a greater degree of rationality to confront the coming challenges.”
Imam concludes his statement by stressing the need for a comprehensive review of the structure of the general budget and the adoption of fairer and more efficient economic policies, calling for “a radical shift in the government’s approach” instead of continuing to repeat the same policies in a vicious circle.
In the same context, MP Maha Abdel Nasser, member of the House of Representatives for the Egyptian Social Democratic Party, criticised the draft general budget for the fiscal year, affirming that some members of Parliament had also rejected it last year “for the same recurring reasons”, and noting that “there is nothing new worth mentioning, except that the situation this year has become more ambiguous and dangerous”.
Abdel Nasser says in a statement to Zawia3: “I do not see anything new in the budget. We reject it every year for the same reasons, but this year is much harder, because all the figures presented are liable to change at any moment as a result of the fast-moving economic conditions. We are discussing figures on paper, but the reality may be completely different after a month or less.”
She adds: “The deeper problem is that the economic path is fixed despite all the criticism, and there is no real progress. There is a lot of talk, but there are no actions on the ground. The President spoke about building the human being, but how do we build the human being without education, health and culture?”
The MP points out that many culture palaces have been closed under the pretext of a shortage of financial allocations, at a time when spending on education still does not exceed 1.5% of gross domestic product, which is considered a violation of the constitutional text that obliges the government to allocate 7% of gross national product to education, scientific research and higher education.
She continues: “It is not possible to talk about a research environment without a strong educational foundation. We are not even starting from the first step. There are efforts, yes, but they have no clear plan, timeframe or methodical vision. Education is not the responsibility of a minister alone, but the responsibility of the entire state.”
During the discussions, a number of MPs rejected the education and health allocations, as they consider that they remain below the percentages stipulated in the Constitution, which they regarded as evidence of the declining priority of human development in government policies, and a repetition of the same fiscal approach that led to the widening of the social gap and the erosion of the middle class.
Do the Education and Health Shares Meet the Constitutional Obligations?
The Egyptian Constitution stipulated a minimum level of spending on the education, health and scientific research sectors, obliging the state to allocate 4% of gross national product to pre-university education, 2% to higher education, 1% to scientific research and 3% to health, that is, a total of at least 10% for the vital sectors that bear on human development. However, the figures contained in the draft 2025/2026 budget reveal a large gap between the constitutional texts and practical application. According to the report of the Plan and Budget Committee of the House of Representatives: “The constitutional entitlements have been met through total direct and indirect spending, so that next year they reach EGP 1.8 trillion, at a rate of 10.7% of gross product, and the constitutional threshold speaks of 10% as a minimum for the four sectors combined.”
The Minister of Parliamentary Affairs and Political Communication, Mahmoud Fawzi, defended the government’s commitment to the spending percentages set by the Constitution for the education, health, higher education and scientific research sectors, estimated at 10%, after more than one MP raised this point during the plenary session.
Fawzi said during the plenary session: “Social welfare areas were at the forefront of the government’s priorities”, explaining that “some aspects of spending are indirect, such as the contribution of university hospitals to health services, as well as the universities affiliated with Al-Azhar, the police and the armed forces, and their role in providing basic health and educational services”, and noting that “spending on health is not measured only by the number of hospitals or the direct allocations to health, but by an integrated system”.
Responding to the statements of Counsellor Mahmoud Fawzi that the budget complied with the constitutional percentage allocated to education and health, MP Maha Abdel Nasser says: “No comment. How did the government comply? This needs explaining. On the ground, interest on debts is included within the education and health allocations in order to reach the constitutional percentage on paper, but what is actually spent is far less than the required figure.”
Abdel Nasser reveals that she had previously debated this point with the Minister of Finance, Dr Mohamed Maait, during the first legislative session, and had told him: “This is a wrong calculation. I have nothing to do with calculations; what concerns me is reality. What is actually spent does not even come close to the percentages they are talking about.”
In a related context, Abdel Nasser warns of the deterioration of citizens’ living conditions amid the continued decline in the quality of public services, saying: “Educational and health services are deteriorating, and people are forced to pay out of their already small incomes to cover what the state does not provide. This situation increases the burdens of living and deepens citizens’ sense of injustice.” In the same context, MP Ahmed El-Farghaly described the budget as “the worst in the history of the Egyptian state”, holding the government responsible for what he described as “the abject failure in managing the economic file”.
El-Farghaly tells Zawia3 that “pensions, health and education are the last priorities of this government, which has drowned the state in loans, and the citizen alone bears the results of this repeated failure.”
The MP affirms that the current government has based its budget on collecting taxes, selling state assets, lifting subsidies on fuel and electricity, and external borrowing, without presenting a real plan for rescue or development.
He stresses that the government has circumvented the constitutional percentages set for the health and education sectors, adding: “The government is out of touch, and it has set the (Takaful and Karama) pension for the Egyptian family at less than one dollar a day, and this figure alone is enough to reveal how far its priorities are from the priorities of the Egyptian people.”
Cosmetic Figures and an Absence of Social Justice
The Socialist Popular Alliance Party issued an analytical paper entitled “Why do we reject the government’s draft budget 2025–2026?”, prepared by the economic researcher Dr Elhamy El-Merghany, a leading figure in the party. The paper stated that public debt service (interest and loan instalments) devours the largest part of the 2025/2026 budget, as a total of EGP 4.38 trillion was allocated to it, equivalent to 64.8% of total uses. The report indicates that this expansion in borrowing represents a continuing and dangerous trend, as the government plans to borrow anew more than EGP 3.5 trillion in a single year.
In contrast, actual spending on the basic social sectors is declining. The government allocated only 1.5% of gross domestic product to education and 1.2% to health, percentages far below the constitutional entitlements that oblige the state to allocate 7% to education and scientific research, and 3% to health.
The paper considers that these figures reflect a structural imbalance in the state’s priorities, as the largest share of resources goes to paying debts, while the allocations for education, health, housing and real support for the poor decline, which threatens the social and economic foundations of stability and entrenches the absence of justice in the distribution of public resources.
The Socialist Popular Alliance Party also strongly criticised the structure of tax revenues in the budget, affirming that the government relies almost entirely on taxes as the main source of revenue, as taxes constitute 85.1% of total public revenues, while other revenues represent only 14.9%.
The report indicated that indirect taxes, such as value added tax and taxes on goods and services, represent 41.6% of tax proceeds, and these are taxes borne by everyone in equal proportions, which makes them harsher on the poor and those on limited incomes.
In contrast, taxes on the liberal professions (such as doctors, lawyers, players and engineers) do not exceed EGP 21.2 billion, while employees and workers pay EGP 222.4 billion, which shows a clear imbalance in the distribution of the tax burden.
In its paper, the party also criticised the absence of a progressive tax system and the failure to impose taxes on wealth or capital gains, describing the current system as one that entrenches inequality and reproduces the class gap, instead of being a tool for achieving social justice as it is supposed to be.
The paper also showed that the item of subsidies, grants and social benefits in the 2025/2026 budget, amounting to EGP 742.5 billion, does not reflect the real state of social spending, but rather involves large-scale accounting manipulation aimed at beautifying the figures more than improving citizens’ lives.
While the figure appears high, the paper reveals that a large proportion of this “support” is directed to purposes that do not directly touch citizens: for example, EGP 153.4 billion to pay the debts of the insurance and pension funds was included under the subsidies item; EGP 9.4 billion for bonuses, decorations and allowances for non-employees was classified as social benefits; and EGP 75 billion for electricity subsidies was reinserted after years of having been removed, despite the continued rise in prices for citizens.
The report also criticised the freezing of the per-person subsidy value on ration cards at EGP 50 since 2018, despite prices having multiplied, in addition to the decline in the number of beneficiaries of ration subsidies from 71 million to 60.8 million people.
The party affirmed that this policy does not express a social state, but rather points to the erosion of the protection system for the poor and the government’s reliance on a bare minimum of symbolic support without radically addressing poverty, unemployment and the deterioration of living standards.
At the conclusion of its report, the Socialist Popular Alliance Party affirms that the draft general budget for the 2025/2026 fiscal year does not express the interests of the majority of the Egyptian people, but rather entrenches a clear bias in favour of capital owners and creditors at the expense of the poor and working people.
The party considers that the budget reflects the absence of a development vision and the continued reliance on debt, the sale of assets and the lifting of subsidies as temporary solutions to a structural crisis, without any radical remedy, affirming that this budget “is nothing but an expression of biased political choices, in which the state abandons its social role and retreats before the conditions of the market and the creditors”.
Editorial correction: The first version of the report stated that the House of Representatives approved the draft budget on Tuesday, 17 July, whereas it in fact approved it on Tuesday, 17 June 2025, two days before the report was published.
Editorial correction: The first version of the report stated that the Constitution obliges the government to allocate 7% of gross domestic product to education, scientific research and higher education, whereas Articles 19, 21 and 23 of the Constitution calculate these percentages on the basis of gross national product.
