Egypt’s public finances showed marked improvement in the first half of the 2025–2026 fiscal year, as a sharp rise in tax revenues helped lift the primary budget surplus and stabilize the overall deficit, according to a statement released by the Ministry of Finance on Wednesday.
The primary surplus rose to 1.8% of gross domestic product between July and December 2025, equivalent to about 383 billion Egyptian pounds, up from 1.3% during the same period a year earlier. The primary surplus measures the gap between government revenues and expenditures excluding interest payments on public debt.
The improvement was driven largely by robust revenue growth. Total budget revenues increased by more than 30% year on year in the first six months of the fiscal year, outpacing the growth in government spending. Tax revenues alone recorded an annual increase of 32%, underscoring the impact of tighter collection and broader tax compliance.
Despite mounting fiscal pressures, Egypt’s overall budget deficit remained unchanged at 4.1% of GDP during the period, reflecting the balance between higher revenues and continued spending demands. Egypt’s fiscal year runs from July 1 to June 30.
The International Monetary Fund has recently praised Egypt’s fiscal performance, noting that the government achieved a primary surplus of 3.5% of GDP in the previous fiscal year, 2024–2025. The IMF attributed that result to strong tax performance, supported by reforms aimed at expanding the tax base, improving voluntary compliance, and streamlining exemptions.
However, the Fund cautioned that Egypt’s tax-to-GDP ratio remains low by international standards, standing at about 12.2%. In its most recent program reviews in December, the IMF urged continued efforts to raise tax revenues and place overall public-sector debt on a clear downward trajectory.
Follow the latest news on Google News
