Egypt's Finance Ministry Highlights Fiscal Policies to Boost Growth and Investment

In response to S&P Global Ratings affirming Egypt’s credit ratings at B/B with a stable outlook, the ministry noted ongoing efforts to attract more foreign direct investment (FDI), diversify economic growth, and increase merchandise and services exports. It remarked that proactive and consistent policies are enhancing the Egyptian economy's resilience to regional crises.

The ministry indicated that the stable outlook signals a balance between growth prospects and continued economic reforms in the medium term. Key growth sectors include manufacturing, telecommunications, and tourism, with growth projected at 5.1% for the fiscal year 2025/2026.

The private sector is reportedly regaining strength, contributing 65% of total investments and experiencing high growth rates. S&P expects further growth as the government continues to introduce incentives, streamline procedures, and enhance policy certainty.

The ministry reported a primary surplus of 4.9% of gross domestic product (GDP) and an overall budget deficit that declined to 5.8% of GDP in the last fiscal year, despite ongoing economic challenges. Tax facilitation measures have increased tax revenues to 13% of GDP without placing additional burdens on taxpayers.

The ministry acknowledged that rising debt-servicing costs and financing needs are ongoing challenges for public finances but noted that these pressures are expected to ease as interest rates decline. Exceptional revenues are being directed towards the government’s debt-reduction strategy and the goal of lowering public debt as a share of GDP.

Plans are in place to reduce public debt to 78% of GDP by June 2027, along with an annual reduction of external debt by approximately $2.1 billion. The government also intends to continue implementing targeted social protection programs for vulnerable groups.