The country’s budget deficit widened to 3.2% of GDP during the first four months of the current fiscal year, up from 2.6% during the same period last fiscal year, according to a Finance Ministry report seen by EnterpriseAM.

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The primary surplus surges: The primary surplus — which excludes interest payments — jumped over 81% y-o-y to record EGP 236.8 bn, equivalent to 1.1% of GDP. The ministry attributed the uptick to greater tax revenues alongside 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 2026-2027.

However, some are a little more optimistic: Fitch Solutions’ research unit BMI expects the budget deficit to shrink to 6.6% of GDP during this fiscal year, and to 6.1% of GDP in the following fiscal year. The World Bank sees the deficit reaching 6.7% in the current fiscal year, while BNP Paribas expects the deficit to reach 6.0% of GDP in FY 2026-27.

Total revenues rose to EGP 863.9 bn during the four-month period, marking a 33.3% y-o-y increase, supported by a 35% y-o-y increase in tax revenues, which came in at EGP 756.7 bn, amid improved relations with the business community and economic activity recovery, according to the report. The state budget penciled in a 23% y-o-y jump in public revenues to EGP 3.1 tn.

In contrast, spending increased 37.3% y-o-y to EGP 1.5 tn during the four-month period, with interest payments accounting for the lion’s share, coming in at EGP 899 bn. The Finance Ministry seeks to distribute the burden of interest payments over the entire fiscal year.

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