The Egyptian Ministry of Finance has stated that its financial policies are designed to support and complement the country's economic path aimed at stimulating investment, growth, and employment. According to the ministry, managing public finances with great flexibility is crucial to stimulating economic activity and driving growth while maintaining financial discipline and reducing debt. This approach is part of Egypt's broader strategy to enhance its economic prospects.
The ministry's statement comes after Standard & Poor's, a leading credit rating agency, maintained Egypt's rating at 'B/B' with a stable outlook. The ministry emphasized its commitment to increasing foreign direct investment inflows, diversifying the growth structure, and boosting merchandise and service exports. These efforts are part of a broader strategy to enhance Egypt's economic resilience in the face of regional challenges.
The stable outlook, according to the ministry, reflects a balance between growth prospects and the continuation of economic reforms over the medium term. Key sectors such as manufacturing, communications, and tourism have been driving growth, which reached 5.1% during the 2025/2026 fiscal year. This growth is a positive indicator of Egypt's economic recovery and its potential for future expansion.
The Egyptian private sector is also showing signs of recovery, with a significant share of 65% in total investments and achieving high growth rates. According to Standard & Poor's, this trend is expected to continue, driven by policies aimed at stimulating and simplifying investment processes. The report also highlights the importance of maintaining these policies to ensure a stable and favorable business environment.
In terms of fiscal performance, the ministry reported a primary surplus of 4.9% of GDP and a decline in the overall deficit to 5.8% of GDP during the previous year, despite facing significant challenges. The ministry attributed this positive performance to tax facilitation measures, which increased the tax revenue to GDP ratio to 13% in the last fiscal year without imposing additional burdens.
However, the ministry also acknowledged that high debt service costs and financing needs pose challenges to public finances. It noted that these challenges are expected to ease with declining interest rates. The ministry emphasized its commitment to directing exceptional revenues towards accelerating the government's debt reduction plan, aiming to lower debt to 78% of GDP by June 2027.
Egypt aims to reduce its external debt by $1-2 billion annually as part of its broader strategy to manage and reduce its debt burden. The ministry also highlighted its ongoing efforts to implement more targeted social protection programs for eligible support groups. By balancing economic growth with social welfare, Egypt seeks to achieve sustainable and inclusive development.
Key points
- Egypt's Ministry of Finance is committed to supporting economic growth and investment through flexible public financial management and targeted social protection programs.
- The country's financial policies aim to stimulate investment, growth, and employment while maintaining financial discipline and reducing debt.
- Egypt targets to lower its debt to 78% of GDP by June 2027 and reduce external debt by $1-2 billion annually.
