According to the report, the local debt eased to 66.7 percent of the GDP at the end of FY2023/2024, compared to 70.5 percent at the end of FY2022/2023. Moreover, the external debt declined to 22.3 percent at the end of FY2023/2024, down from 25.2 percent at the end of FY2022/2023.

Egypt pledged to decrease the high debt level to below 80 percent in 2027, in line with its commitments under the International Monetary Fund's (IMF) programme. 

The IMF estimated Egypt’s overall debt in FY2022/2023 at 98 percent of the GDP. However, the government plans to bring the debt-to-GDP ratio down to 88.2 percent in the current FY2024/2025, which ends on 30 June 2025.

As per the report, debt services acquired almost 60 percent of the total revenues and expenses of the budget in FY2023/2024, compared to around 25 percent in FY2022/2023.

Egypt’s revenues in FY2023/2024 jumped to EGP 2.1 trillion, representing 18.1 percent of the GDP, up from approximately EGP 1.6 trillion (15.5 percent) in FY2022/2023, with debt services exceeding EGP 1.1 trillion in FY2023/2024.

Out of the total revenues, tax revenues rose to EGP 1.5 trillion in FY2023/2024, up from approximately EGP 1.2 trillion in FY2022/2023.

Meanwhile, expenditure increased to almost EGP 3 trillion in FY2023/2024, accounting for 25.3 percent of the GDP, up from EGP 2.1 trillion (21.6 percent) in FY2022/2023. The expenditure level in FY2023/2024 was the highest in five fiscal years.

The IMF’s Executive Board is set to decide on the third review of Egypt’s $8 loan programme on Monday 29 July, unlocking a tranche of $820 million once approved.

The key objectives of this loan programme are as follows.

• Shifting to a flexible exchange rate system will help Egypt’s domestic economy adjust more smoothly to external shocks, enhance the ability of Egyptian businesses to sell their goods and services abroad, and encourage greater investment.
• Monetary and fiscal policy tightening, including through containing off-budget capital expenditure, is needed to reduce inflation and maintain debt sustainability. Managing large capital inflows prudently will be important to contain inflationary pressures and limit future external vulnerabilities.
• In recognition of the significant adverse impact of high inflation on purchasing power, targeted budget support to vulnerable households is warranted and budget space for such support should be protected.
• The roles of the public and private sectors should be better balanced, focusing on enhancing competition and allowing a greater role for the private sector in driving growth.