Egypt plans record public spending to cut debt

• Target of 5% primary budget surplus
• Spending to exceed $100bn
• Revenues forecast to jump 32%

Egypt expects public spending to reach a record level in the fiscal year starting on July 1, as it tries to curb debt and lift productivity.

Spending in the 2026-2027 fiscal year is projected to rise 13 percent to EGP5.2 trillion ($104 billion), while revenues are forecast to jump 32 percent to EGP4.1 trillion, finance minister Ahmed Kouchouk said.

Kouchouk did not say how the government expects to deliver such a sharp rise in revenue, but Egypt has been trying to raise tourism receipts, privatise public utilities, expand exports and hydrocarbon output, and improve the tax system.

“We aim to achieve the highest primary budget surplus of 5 percent of GDP in the next fiscal year,” he said in a statement. The primary budget surplus refers to the balance before debt servicing – the budget is expected to show an overall deficit of about 5 percent of GDP.

The budget, approved by parliament this month, sets aside $1 billion to $2 billion for debt repayment, with the aim of cutting the debt-to-GDP ratio to 78 percent, Kouchouk said.

He also said the government plans to cap borrowing in the medium term at 10 percent of GDP and reduce debt servicing to 35 percent of spending.

Besides debt repayment, the budget includes bigger allocations for health and education, up 30 percent and 20 percent respectively, along with EGP178 billion for food and consumer item subsidies and about EGP80 billion to support production and exports.

In a report last year, the World Bank estimated Egypt’s total debt at more than $160 billion, with servicing of nearly $33 billion in the 2024-2025 fiscal year.

Further reading:

• Egypt is the new Arab tiger for global debt and equity investors
• Egypt’s food exports hit record high in 2025
• Egypt’s spending rises after increase in debt payments

Interest payments on Egypt’s debt rose about 40 percent to nearly EGP1.5 trillion in the first seven months of the 2025-2026 fiscal year, from about EGP1.05 trillion in the same period of the previous fiscal year.

Egypt’s investment and foreign trade minister, Hassan Al-Khatib, said in Davos earlier this year that the country has reduced public debt over the past 18 months through privatisation revenues and higher tax earnings.

He said tax revenues increased 35 percent to their highest level since 2005, while the trade deficit fell to about $34 billion, its lowest level in 15 years.