Egypt approves emergency austerity plan to counter regional tensions

The Egyptian government has approved an emergency plan to rationalize public spending in response to economic pressures caused by escalating regional tensions. The measures, which include 19 specific actions and five exceptions, are set to be implemented for an initial period of three months, with the possibility of extension.

Key measures include reducing electricity and lighting consumption in government entities by 20%, cutting fuel use for government vehicles by at least 30%, and freezing at least 20% of budgets for purchasing goods and services. The plan also prohibits spending on advertisements, parties, and conferences without prior approval, and halts the purchase of new passenger vehicles until June 30, 2027. Additionally, new investment projects will be postponed, and foreign currency expenditures will require coordination with the Ministry of Finance and the Central Bank.

To mitigate social impact, the government has exempted essential sectors from these restrictions, including healthcare, medical care, national security, pensions, and social protection programs such as the “Takaful and Karama” initiative and food subsidy programs. The plan aims to prioritize the completion of ongoing, necessary projects in sectors such as education, water, food, and energy.