IMF: Egypt Still Faces Significant Fiscal Pressures despite Medium-Term Improvement

Egypt continues to grapple with substantial fiscal challenges, despite expectations of gradual improvement in key economic indicators over the medium term, according to officials from the International Monetary Fund (IMF) during the launch of its latest Fiscal Monitor Report.

Speaking at a press conference in Washington, Era Dabla-Norris, Deputy Director of the IMF’s Fiscal Affairs Department, underscored that high public debt and large financing needs remain central concerns for the Egyptian economy.

“Maintaining fiscal discipline remains a top priority,” she said, noting that elevated debt levels continue to weigh on the country’s financial outlook.

The IMF highlighted that Egypt is facing mounting fiscal strain driven in part by rising global energy prices, a significant factor given the country’s status as a net energy importer. Increasing fuel and import costs, combined with tighter global financial conditions, are adding pressure to public finances.

Despite ongoing regional tensions, including conflict in the Middle East, the Fund noted that the economic impact on Egypt has so far been contained. This resilience has been attributed to what officials described as “decisive and coordinated” policy measures implemented by the government.

IMF officials stressed that sustaining and deepening fiscal reforms will be crucial in the coming period. Key priorities include strengthening public debt management, improving revenue mobilization, and reducing the state’s footprint in economic activity to create more space for private sector growth.

Such measures, the Fund argues, are essential to enhancing fiscal sustainability and improving the economy’s capacity to absorb external shocks.

According to the Fiscal Monitor, Egypt’s overall fiscal deficit is projected to widen sharply to 12.1% of GDP in 2026, up from 6.6% in 2025, before narrowing significantly to 3.1% by 2031.

Public debt, meanwhile, is expected to decline from 90.9% of GDP in 2024 to 70.9% by 2031. Government revenues are also forecast to gradually improve, reaching 17.2% of GDP by the end of the forecast period.