Egypt Targets Lower Budget Deficit at 6.1%

Egypt announced plans to reduce its overall budget deficit to 6.1% in the current fiscal year, as part of a broader medium-term strategy aimed at strengthening fiscal stability and improving macroeconomic performance.

The announcement was made by Finance Minister Ahmed Kouchouk during a press conference outlining the country’s budget framework for 2026–27.

The government also set a further target to narrow the deficit to 4.9% by the 2026–2027 fiscal year, down from an estimated 7.6% recorded in the previous year (2024–25), and 7.3% targeted for 2025–2026.

Officials said the new budget reflects a shift toward medium-term fiscal planning, with projections extending over three years being submitted to parliament for the first time alongside the annual budget. The approach aims to provide a more flexible and forward-looking framework that can adapt to changing economic conditions.

The budget assumes an average oil price of around $75 per barrel, a key benchmark for energy-related fiscal calculations.

On the revenue side, Egypt is targeting approximately 4 trillion Egyptian pounds in the 2026–2027 fiscal year, representing growth of about 27.6%. Expenditures are projected at 5.1 trillion pounds, an increase of 13.2%.

The government also aims to achieve a primary surplus of 5% of GDP, equivalent to roughly 1.2 trillion pounds, as part of its broader effort to stabilize public finances and reduce debt pressures.

In parallel, officials said external debt within the budgetary framework has already declined by about $1 billion at the start of the year, while total external debt is targeted to fall to $77.5 billion.

Social protection spending remains a priority, with allocations reaching 832.3 billion pounds, reflecting a 12% annual increase. The government also plans to channel around 120 billion pounds in energy support.

Authorities emphasized that the fiscal strategy is designed not only to reduce the deficit but also to support economic growth, which is projected at 5.4%, alongside inflation stabilization at 9.3%.

The announcement signals Egypt’s continued push toward fiscal consolidation while balancing social spending and investment-driven growth.