Ahmed Kamel – Egypt Daily News
Egypt has announced plans to reduce its overall budget deficit to 6.1% of GDP in the current fiscal framework, as part of a broader medium-term fiscal strategy aimed at strengthening economic stability and public finances.
The announcement was made by Finance Minister Ahmed Kouchouk during a press conference on Saturday unveiling the draft budget for the 2026–2027 fiscal year.
The government said it now targets a further reduction in the deficit to 4.9% by fiscal year 2026–2027, down from earlier projections of 7.3% for 2025–2026 and 7.6% recorded in the previous year.
Officials also outlined a shift toward a three-year budget planning framework, with forward-looking fiscal projections submitted to parliament alongside the upcoming annual budget. The approach is intended to improve medium-term planning and allow adjustments based on economic conditions.
According to the finance ministry, total revenues are projected to reach around 4 trillion Egyptian pounds in 2026–2027, while expenditures are expected to rise to approximately 5.1 trillion pounds. The government is also targeting a primary surplus of 5% of GDP, equivalent to 1.2 trillion pounds.
The budget includes a 27% increase in tax revenues, amounting to an additional 745 billion pounds, as part of efforts to broaden the revenue base and improve fiscal sustainability. Social protection spending has been set at 832.3 billion pounds, reflecting a 12% annual increase.
The government also aims to reduce the debt burden of budget-financed entities to 78% of GDP, alongside a 1% reduction in interest payments during the fiscal year.
External debt for budget entities has already declined to approximately 77.5 billion dollars, down from 78.5 billion dollars at the start of the fiscal year, with further reductions of 1–2 billion dollars expected as Egypt continues a policy of net repayment rather than increased borrowing.
The budget assumes an average oil price of around 75 dollars per barrel and projects a reduction in energy subsidies to approximately 120 billion pounds.
In addition, the government plans to complete three new public offerings before the end of June 2026 as part of its state asset monetization program, aimed at increasing private sector participation in the economy.
Officials said the economy is expected to grow by 5.4% in the 2026–2027 fiscal year, while inflation is projected to stabilize at around 9.3%, reflecting ongoing efforts to maintain macroeconomic stability.
