Egypt lowers debt-to-GDP ratio in 2022/23 amid revenue surge

Ahram Online , Thursday 10 Aug 2023

Egypt has lowered its estimates for the debt-to-GDP ratio to 95.6 percent for the fiscal year 2022/2023, down from 97 percent, Minister of Finance Mohamed Maait stated, according to a Cabinet statement on Thursday.

The Nile river. AFP
The Nile river. AFP


The modified estimate came as the country’s budget deficit edged lower to six percent from 6.1 percent in the previous year,

Total government revenue rose by 15.5 percent on a yearly basis in FY2022/23, supported by a 27.2 percent increase in tax revenue and a 71 percent surge in revenue generated from the Suez Canal, Maait revealed.

The minister highlighted that customs taxes generated EGP 54.6 billion, representing a 27.2 percent yearly increase. Simultaneously, property taxes jumped by 34 percent to EGP 6.2 billion.

Maait also revealed, according to the same statement, that the cost of food subsidies increased by more than 35.3 percent to EGP 121.8 billion in FY2022/23 from EGP 90 billion in the previous year.

Maait stated that petroleum products subsidies surged by 93.5 percent on an annual basis to reach EGP 116 billion in FY2022/23.

The primary budget surplus reached EGP 164.3 billion ($5.3 billion) in FY2022/23, a surplus of 1.7 percent of the country's GDP.

Egypt is attempting to navigate the economic crisis that hit the country on the heels of the eruption of the Ukrainian war in February 2022, which caused global and domestic inflation to spiral, compounded by surges in grain prices.

To mitigate the $17 billion financing gap through 2026 and the scarcity of US dollar liquidity in the local market, Egypt initiated a programme to sell state-owned assets. This strategy has generated approximately $2 billion to date.

The government also aims to collect $83 billion in foreign currencies during FY2023/24.

Egypt has been increasing its efforts to fulfil its commitments to the IMF under the Extended Fund Facility (EFF) loan programme, approved in December 2022. 

Under the agreement, the government aims to decrease the gross debt-to-GDP ratio to approximately 83 percent by the fiscal year 2026/27.

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