Debt servicing costs have declined month-on-month from 81.8 percent during the first nine months of FY2025/2026 and from around 84 percent year-on-year during the first 10 months of FY2024/2025.
Economic growth in Egypt remains resilient despite ongoing regional tensions linked to the US-Israeli war on Iran, which has affected inflation and currency fluctuations, though the impact remains relatively contained.
It is worth noting that the International Monetary Fund is currently in Cairo to conduct the seventh review of Egypt’s Extended Fund Facility (EFF) programme and the second review under the Resilience and Sustainability Facility (RSF), which could unlock around $1.6 billion in new financing for Egypt. The reviews are expected to conclude on 15 June.
Meanwhile, the overall budget deficit for the period July 2025 to April 2026 reached 5.3 percent of GDP, compared with 6.2 percent during the same period a year earlier, and 5.2 percent during the first nine months of the current fiscal year.
A primary surplus, which excludes debt servicing, rose to EGP 897 billion, or 4.2 percent of GDP, up from EGP 536 billion, or 3 percent, a year earlier.
The government’s full-year budget targets revenues at 15.3 percent of GDP and expenditure at 22.4 percent. For 2026/2027, total budget revenues are projected to rise by 27.6 percent to EGP 4 trillion, driven largely by a 27 percent increase in tax receipts.
Total revenues rose by 34.7 percent, or EGP 686.7 billion, to nearly EGP 2.7 trillion during the first 10 months of the fiscal year, up from EGP 1.97 trillion in the same period the previous year.
Tax revenues rose 29.3 percent year-on-year to EGP 2.21 trillion, equivalent to 10.4 percent of GDP and 82.9 percent of total revenues. The increase, amounting to EGP 500.2 billion, was driven by gains across most categories.
Income tax revenues led the rise, increasing 42.1 percent, or EGP 242.3 billion, to EGP 818.5 billion, driven by higher collection across categories.
Taxes on local wages climbed 35 percent to EGP 204.2 billion, while revenues from commercial and industrial activities by individuals rose 44.6 percent to EGP 132.6 billion. Taxes on non-commercial professions increased 45 percent to EGP 18.8 billion.
Corporate tax revenues rose 45.6 percent, or EGP 141.9 billion, to EGP 453.1 billion. This included a 52.8 percent increase in taxes from other companies to EGP 327 billion, and a 19.3 percent rise in Suez Canal-related taxes to EGP 92.1 billion.
Non-tax revenues also increased, with collections from sovereign entities rising by EGP 1.93 billion year on year to EGP 2.41 billion, while revenues from non-sovereign entities rose by nearly 35 percent, or EGP 171 million, to EGP 660 million.
Spending still growing
Spending growth, however, continued to outpace revenue gains. Total expenditure rose 21.2 percent year-on-year to EGP 3.73 trillion, compared with EGP 3.08 trillion in the same period a year earlier.
Interest payments increased by 21.9 percent, or EGP 363.1 billion, to EGP 2.02 trillion, reflecting the rising cost of debt servicing.
Total budget revenues increased by almost 35 percent to EGP 2.66 trillion over the 10 months.
Wages and compensation increased 13.3 percent to EGP 538.8 billion, while spending on goods and services rose 26.8 percent to EGP 166.6 billion.
Subsidies, grants, and social benefits increased 13.7 percent, or EGP 68.3 billion, to EGP 565.8 billion. This included an increase of EGP 16.2 million in food subsidies, bringing the total to EGP 143.3 billion, and a rise of EGP 6 billion in export subsidies to EGP 18 billion.
Spending on cash transfer programmes, including Takaful and Karama, reached EGP 42 billion. Treasury contributions to pensions rose by EGP 11.7 billion to EGP 136.5 billion, while spending on medical treatment increased by EGP 1.3 billion to EGP 12.5 billion.
VAT keeping upward streak
Value-added tax (VAT) revenues continued to grow, rising 22.7 percent, or EGP 168.1 billion, to EGP 907 billion.
VAT on goods increased 12.3 percent, or EGP 51.6 billion, to EGP 469.4 billion, supported by a rise of EGP 16.3 billion in taxes on imported goods to EGP 305 billion, and an increase of EGP 35.2 billion on locally produced goods to EGP 164.5 billion.
VAT revenues from services rose 33.9 percent, or EGP 32.6 billion, to EGP 128.8 billion. This included a rise of EGP 20.7 billion from hotels and restaurants to EGP 34 billion, and an increase of EGP 2.9 billion from toll manufacturing services to EGP 44.7 billion.
Telecommunications services revenues increased by EGP 6 billion to EGP 28.3 billion, while other services rose by EGP 3 billion to EGP 21.9 billion.
Taxes on locally manufactured commodities rose 43.9 percent, or EGP 57.5 billion, to EGP 188.2 billion. Development fees increased 20.1 percent, or EGP 2.9 billion, to EGP 17.1 billion, while stamp taxes rose 34.9 percent, or EGP 15.5 billion, to EGP 60 billion.
Taxes on the use of goods rose 23.1 percent, or EGP 6.9 billion, to EGP 36.9 billion, while taxes on specific services increased 20.8 percent, or EGP 1.1 billion, to EGP 6.6 billion.
Property tax revenues rose 20.9 percent, or EGP 59.5 billion, to EGP 344.1 billion, supported by higher taxes on treasury bills (T-bills) and bond yields, which increased 20.6 percent, or EGP 54.1 billion, to EGP 316.6 billion. Taxes on car licences rose 20.9 percent, or EGP 2.8 billion, to EGP 16 billion.
Taxes on international trade increased 15.6 percent, or EGP 15.4 billion, to EGP 113.7 billion.
Other tax revenues recorded EGP 25.4 billion, highlighting increased tax revenues from movable capital revenues transferred from the Central Bank of Egypt (CBE).
Non-tax revenues, which account for 17.1 percent of total revenues, rose by EGP 186.5 billion to EGP 454.4 billion, driven mainly by an increase in grants of EGP 7.4 billion to EGP 14.1 billion, supported by higher grants from government entities of around EGP 11 billion and grants from foreign governments of EGP 2.4 billion.
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