Egypt’s debt balance and net borrowing ratios declined as a share of gross domestic product (GDP) in the first half of the fiscal year 2025/26, pushing down the debt-to-GDP ratio of budget entities compared with the same period a year earlier, the Ministry of Finance’s media observatory said on Wednesday. The country’s fiscal year begins on July 1.
According to a statement released by the media observatory, the improvement coincided with easing risk indicators in international markets and among investors, it said, citing a fall in the five-year credit default swap (CDS) spread to below 270 basis points on Jan. 6, its lowest level since 2020. Yields on Egypt’s international bonds also dropped by about 300–400 basis points from a year earlier.
The observatory rebutted a report aired by a regional Arab television channel on Egypt’s public debt, describing it as inaccurate and potentially misleading. It said the report focused on new domestic debt issuances during the first half of the fiscal year without accounting for repayments and amortisations over the same period, or for other forms of debt, particularly external borrowing.
“This selective presentation creates the false impression that the debt balance rose by the value of new issuances,” read the statement, adding that debt levels are determined by net domestic and foreign borrowing, not gross issuance.
The Ministry of Finance reserves the right to take legal action against those it said presented figures unprofessionally in ways that distort public finances or government debt and cause confusion.
According to the statement, Egypt’s public revenues rose by more than 30 per cent in the first half of the fiscal year 2025/26, outpacing expenditure growth, while tax revenues increased by over 32 per cent year on year. The gains helped generate a primary surplus of nearly LE383 billion, equivalent to about 1.8 per cent of GDP, up from 1.3 per cent a year earlier, stabilising the overall budget deficit at 4.1 per cent of GDP.
According to the statement noted that the second half of the fiscal year typically delivers stronger results due to the tax filing season and the transfer of surplus profits from state-owned companies and entities between March and June.
The observatory said the positive performance supports the budget’s ability to meet its targets for the fiscal year, citing robust and diversified economic activity, strong growth in private investment, and solid exports of goods and services.
