Egypt enacts sweeping 30% energy and spending cuts amid regional economic pressures

The Egyptian finance ministry has directed all government entities to cut energy consumption by up to 30% during Q4 of the current fiscal year (FY 2025/26), spanning April to June 2026, Al Ahram reported on April 19. 

The move comes as part of a sweeping set of austerity measures taken by the government, which aim to curb public expenditure as the country responds to mounting geopolitical tensions in the region and their economic fallout.

The measures also mandate a reduction of at least 30% in fuel use for government vehicles, as well as petroleum products and natural gas, compared with average consumption in the preceding quarter.

Electricity usage is to be reduced by 15% over the same period. The government has further ordered the postponement of non-essential spending and tightened controls on foreign currency transactions, requiring prior approval from the Central Bank of Egypt (CBE). 

The directive restricts overseas travel to urgent cases only and places strict limits on new investment projects. No new initiatives may proceed without the prime minister's approval, while fuel-intensive national projects are to be temporarily slowed.

Authorities also capped monthly investment payments and urged public bodies to boost self-generated revenues to ease reliance on borrowing. Spending will prioritise critical sectors, including healthcare, energy and food supply.

The fresh move follows recent praise from the IMF Managing Director Kristalina Georgieva, who commended Egypt’s response to ongoing economic challenges.

To mitigate the economic impact of the US war with Iran, Egypt has implemented a nationwide energy-saving plan that includes raising fuel prices by up to 30% and enforcing a 9:00 PM closing time for most shops, malls, and restaurants to reduce the state's soaring energy import bill.