Egypt’s spending rises after increase in debt payments

• Spending up $12bn
• Debt interest payment rose 40%
• Tax revenue up 35%

Egypt’s spending soared in the first 7 months of the 2025-2026 fiscal year due to a sharp rise in debt interest payments.

Expenditure swelled by EGP597 billion ($12 billion), or 29 percent, during the July 2025 to January 2026 period, reaching EGP2.65 trillion, the finance ministry said in a report carried by Egypt’s national media authority on Friday.

The Egyptian fiscal year begins each year on July 1.

There was an increase in most parts of the expenditures, including wages to public servants, subsidies, social aid and debt interest payments, the ministry said.

Payment for interest on the country’s massive debt soared by around 40 percent to nearly EGP1.48 trillion from about EGP1.05 trillion, the ministry said.

Public investments rose to EGP182 billion from EGP116 billion during that period, it added.

The ministry did not mention revenues or the deficit in the first seven months of the fiscal year but the actual shortfall stood at around EGP1.26 trillion in the 2024-2025 fiscal year, sharply higher than the previous year’s deficit.

Egypt’s investment and foreign trade minister Hassan Al-Khatib said in Davos last month that the country has managed to reduce public debt over the past 18 months through privatisation revenues and higher tax earnings.

Al-Khatib said tax revenues soared by nearly 35 percent to their highest level since 2005 while the trade deficit dipped to its lowest level of around $34 billion in 15 years. 

• Egypt is the new Arab tiger for global debt and equity investors
• Egypt’s food exports hit record high in 2025
• IMF completes Egypt reviews, unlocking about $2.3bn

Finance minister Ahmed Kouchouk told US investors in October that Egypt intends to use funds from the sale of public enterprises to reduce the ratio of national debt to GDP to 75 percent in the next three years.

He said the plan also envisages a reduction of debt servicing to 7 percent of GDP and an extension of the average debt maturity to five years.

At the end of 2025, the Egyptian government’s debt ratio to GDP stood at around 74 percent against 77 percent at the end of 2024, the Washington-based Institute of International Finance said in a report this week.

Despite the decline, Egypt remained the third-largest Arab debtor after Bahrain and Jordan, with their debt-to-GDP ratio standing at 142 percent and 89 percent respectively, IIF said.