Egypt Targets Public Debt Cut to 78% of GDP

The Egyptian government is targeting a reduction in budget-sector public debt to around 78% of GDP during the current fiscal year, Prime Minister Mostafa Madbouly said.

Debt stood at approximately 81.8% of GDP at the end of FY2025/26, when economic growth reached 5.1%. Madbouly said a gradual reduction plan has been drawn up, with a presidential directive to work towards 75%.

The previous fiscal year also recorded a primary surplus of 4.9% of GDP. Government revenues rose 32%, while tax revenues increased by around 27% without higher tax rates, according to Madbouly, who attributed the gains to a broader tax base, stronger collection and tighter spending.

Budget-sector external debt declined from USD 79.1 billion two years earlier to USD 76.1 billion by June 30th, 2026. The government plans to reduce the figure by a further USD 1.5 billion to USD 2 billion annually.

Madbouly said lower debt-servicing costs would free additional funding for public services. Health allocations rose by around 30% in FY2026/27, while education allocations increased by roughly 20%.

Foreign-currency indicators also strengthened, with net international reserves reaching around USD 57.2 billion. Madbouly also pointed to stronger remittances, tourism growth and recovering Suez Canal revenues.

Nationwide inflation stood at 12.7% in August, down from 23.2% in January 2025, while unemployment was 5.8% in the second quarter of 2026.