Egypt to cut government spending, boost strategic reserves amid regional tensions

Egypt is increasing its strategic commodity stockpiles and drafting a comprehensive plan to rationalise government spending to mitigate the potential economic impact of escalating regional geopolitical tensions.

Prime Minister Mostafa Madbouly outlined the measures during a meeting of the Central Crisis Management Committee in the New Administrative Capital on Monday evening, noting the government is preparing for various scenarios to ease the effects of the crisis on local and global markets.

The government’s preparations include boosting goods and product inventories to secure citizens’ needs, alongside reducing government consumption of fuel and energy to sustain vital sectors, Madbouly said.

Finance Minister Ahmed Kouchouk and Planning and Economic Development Minister Ahmed Rostom told the committee they are finalising a strategy to rationalise public expenditure and maximise the efficiency of state resources in response to rapid regional and global developments.

The ministers stressed that the proposed plan guarantees the continuation of economic and productive activities, as well as the availability of financial allocations for basic commodities and petroleum materials.

Minister of Supply and Internal Trade Sherif Farouk stated that Egypt’s strategic reserves of various commodities are sufficient for an average of six months, with some goods exceeding that timeframe. He added that new contracts have been signed to further boost inventories.

Farouk also reviewed the status of an initiative to reduce the prices of basic goods, which currently includes 30 commodities sold at 15% to 25% discounts compared to external markets through an expanded nationwide network of outlets.

The crisis management meeting was attended by Central Bank of Egypt Governor Hassan Abdalla, Electricity and Renewable Energy Minister Mahmoud Esmat, Agriculture and Land Reclamation Minister Alaa El-Din Farouk, Petroleum and Mineral Resources Minister Karim Badawi, Minister of State for Information Diaa Rashwan, and Industry Minister Khaled Hashem.

Deputy Finance Minister for Fiscal Policies Yasser Sobhi, Deputy Foreign Minister for African Affairs Ambassador Mohamed Abu Bakr, Major General Mohamed Helmy of the Armed Forces Operations Authority, and other officials were also present.