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Egypt expects to raise its allocation for food subsidies by 20% and for petroleum products by 24% in the 2023-24 fiscal year, according to a draft budget approved by the cabinet on Wednesday.

The budget forecasts GDP growth at 4.1% and inflation at an average rate of 16% during the next fiscal year, which starts in July, according to a cabinet statement.

Egypt has been struggling to contain economic pressures exposed by the consequences of the war in Ukraine, which include rising costs to grain and fuel imports.

Its currency has come under renewed pressure this month despite three sharp devaluations since last March that have seen the Egyptian pound lose nearly half its value against the dollar. Headline inflation has accelerated to five-and-a-half year highs of 31.9%.

Despite the challenges, the government is projecting a primary surplus of 2.5%, a 38.4% rise in overall revenues and a 28% rise in tax revenues, the cabinet statement said.

The budget still needs approval by Egypt's parliament.Ìý

(Reuters)