Egypt’s debt service burden currently surpasses 50 percent of its public spending, economist Nermin Tahoun warned on Monday, underscoring the significant fiscal challenge facing the government.
This situation creates a stark contrast with the nation’s recently announced historic primary surplus.
Tahoun’s statements highlight the structural tensions within the Egyptian economy. While she acknowledged the severe pressure from debt servicing, she commended the Egyptian Ministry of Finance’s announcement of a primary surplus of 3.1 percent of GDP between July 2024 and April 2025, amounting to nearly 600 billion Egyptian pounds.
This surplus marks the highest in the country’s history, achieved despite a substantial 40 percent decline in revenues from the Suez Canal in the first quarter of 2025, as well as a drop in the oil sector. According to Tahoun, this impressive result reflects a significant improvement in budget management, driven by enhanced tax collection efficiency and tighter control over public expenditures. The surplus enables the government to finance essential expenses without resorting to borrowing to cover the current account deficit, thereby helping to reduce pressure on public debt.
However, Tahoun emphasized the crucial need for Egypt to sustain this primary surplus, particularly as economic growth remains moderate, hovering between 3.5 percent and 4 percent—below the country’s long-term objectives. She called for a delicate rebalancing act between fiscal austerity measures and strategies that actively support economic growth.
SL/Sf/ac/fss/abj/APA