The average budget deficit in Egypt for the past 42 years was 7.9%, achieving its best figures soon after the Gulf War
Egypt is aiming to lower the public budget deficit in the next five years to 4%, said Finance Minister Mohamed Maait during a session at the first day of the Egyptian Economic Conference, targeting a rate not seen since the 1980s.
The average budget deficit in Egypt for the past 42 years was 7.9%, achieving its best figures soon after the Gulf War which saw debts drop and Egypt’s budget deficit was cut to 5%, the minister explained.
Egypt’s budget deficit in the emerging market hit 5.4%, with the current budget deficit standing at 6.1%.
Prior to the pandemic, Egypt was on its way to achieving its lowest public debt-to-GDP rate at 80.2%, however, the pandemic and following economic crisis paused this trajectory, leading to 87.2%.
The lowest debt-to-GDP ratio recorded over the past 42 years was 78.7%, with the maximum debt reaching 159%, he noted.
The government aims to reduce its general debt by international institutions to 72% in the next five years, with it currently standing at 85.2%.
The finance minister expects Egypt to see a surplus of 2.3% within FY2026/2027.
Egypt did not achieve a budget surplus in 42 years until 2017/2018, after which it began to increase the fiscal surplus with 2022 achieving 1.3%.
The government is targeting a raise in gas exports worth $1 billion by January 2023, currently gas exports are valued at around $600 million, said Maat.
Egypt’s fiscal performance for FY 2022/2023 is encouraging despite the difficult global climate, with Maait adding that Egypt has achieved a surplus of 11% of GDP between July and September 2022.
Foreign direct investments have reached $8.9 billion, with an increase of 71.4%, the finance minister added.
Tax revenues represent three-quarters of the Egyptian state’s revenues, explained Maait, adding that there is a positive correlation between the increase in public revenues and the increase in taxes.
“The state's public debt is an important item in the Egyptian economy, and the state is working on this matter through a clear plan,” he stated, saying that the state is working on a medium revenue strategy, and on increasing the tax revenue, by integrating the informal economy, in addition to improving the business and investment environment.
