The country’s budget deficit widened to 2.5% of GDP during the first quarter of the current fiscal year, up from 2.1% during the same period last year, according to a Finance Ministry report seen by EnterpriseAM.

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Primary surplus jumps: The primary surplus — which excludes interest payments — nearly doubled y-o-y to EGP 178 bn, equivalent to 0.9% of GDP. The ministry attributed the improvement to stronger tax revenues and greater fiscal discipline.

REMEMBER- The FY 2025-26 budget pencils in a 4.0% primary surplus, up from 3.5% last fiscal year. The budget also sees the overall deficit narrowing to 7.3% of GDP, from last year’s 7.6%, before falling further to 5.5% in FY 2026-27.

Total revenues rose to EGP 644.9 bn during the quarter, up 37.2% y-o-y, supported by a 37% rise in tax revenues to EGP 556.2 bn amid an improved relationship with the business community, according to the report. The state budget penciled in a 23% y-o-y jump in public revenues to EGP 3.1 tn.

Interest payments remain the biggest burden: Despite the revenue growth outpacing expectations, spending surged 39.1% y-o-y to EGP 1.2 tn during the three-month period. Interest payments accounted for the lion’s share with EGP 695.2 bn. For the entire fiscal year, interest spending is expected to make up over half of total expected spending, at EGP 2.3 tn.

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