Egypt aims to cut foreign debt by up to $2bn in next budget

• Budget presented in parliament
• Revenues projected to rise 30%
• Deficit target of 4.9% of GDP

Egypt is banking on higher public revenues from exports and sale of government enterprises to slash its foreign debt by $1 billion to $2 billion in its 2026-2027 budget.

Presenting the budget to parliament on Wednesday, finance minister Ahmed Kouchouk said revenues are projected to rise by 30 percent over the previous budget and spending by about 13 percent.

Revenues are forecast at EGP4 trillion ($77 billion) and expenditure at nearly EGP5.1 trillion, he said, adding that budget priorities are for supporting citizens, enhancing financial stability, stimulating the economy and strengthening confidence with the business community.

“Given my experience in the Egyptian economy, I believe the revenue target for the coming fiscal year can be achieved,” said Jamal Banoun, director of the Riyadh-based SMS economic consultancy centre.

Egypt indicators

“The increase will come from land sale to Egyptians, privatisation of public enterprises, a reported increase in non-oil exports and a sharp rise in tax receipts and tourism revenues. Egypt is getting large funds from giant tourism investment projects announced by Abu Dhabi and Qatar.”

In statements on the ministry’s website, Kouchouke said the 2026-2027 budget, which takes effect on July 1, targets a deficit of 4.9 percent of GDP, reducing the total debt to GDP ratio to 78 percent in June 2027, down from 87 percent in the previous year.

This would effectively cut the foreign debt by $1 billion to $2 billion, he said.

Borrowing will be trimmed to around 10 percent of GDP during the next fiscal year while debt servicing will be reduced to about 35 percent in the medium term, the minister added, without specifying the current servicing level.

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Spending includes EGP80 billion to support production, manufacturing, entrepreneurship and exports, EGP6.7 billion for the tourism sector, EGP6.7 billion to support export agencies, EGP821 billion pounds for public sector wages and EGP832 billion pounds for social support and protection, he added.

The International Monetary Fund (IMF) urged Egypt in July last year to accelerate procedures for the sale of public entities within its privatisation programme to spur growth and boost revenue.

While Egypt has made “significant progress” in restoring macroeconomic stability since March 2024, deeper structural reforms are needed to unlock investment and create jobs, the IMF said.