Interest payments on public debt jumped 40.9% y-o-y in 7M FY 2025-26, reaching EGP 1.5 tn, as high interest rates and a large debt stock continued to drive servicing costs, according to the Finance Ministry’s latest financial performance report (pdf). The surge effectively absorbed the bulk of tax gains, as tax revenues rose 31.4% y-o-y to EGP 1.4 tn by the end of January.

Revenues showed solid momentum overall, with total public revenues climbing 41% y-o-y to EGP 1.8 tn during the same period, supported by a near doubling of non-tax revenues, which rose 95.9% to EGP 369.2 bn.

Yet spending pressures remained, with total public expenditure increasing 29.5% y-o-y to EGP 2.6 tn, reflecting heavier interest payments alongside higher outlays on wages, compensation, subsidies, and public investments.

Even so, headline fiscal metrics improved. The overall budget deficit held at 4.2% of GDP, narrowing by 0.2 percentage points y-o-y, while the primary surplus more than doubled, rising 119% y-o-y to EGP 601.9 bn, equivalent to 2.9% of GDP — underscoring the government’s ability to generate a surplus before interest obligations.

What’s next? Public revenues are projected to exceed EGP 3.5 tn in the next fiscal year, government sources told EnterpriseAM earlier this week. The government is targeting revenue gains equivalent to 1-2% of GDP, driven mainly by EGP 2.8 tn in tax and customs collections — up from the EGP 2.6 tn targeted in the current budget — as part of efforts to widen the tax base and create fiscal room for priority spending.

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