120% surge in loan services payment push Egypt’s budget deficit higher

The surge is the result of a 120.1 percent hike in the interest payment of loans, read a report by the Ministry of Finance on Monday.

Interest payments increased to EGP 477.493 billion ($15.45 billion) between the beginning of July and the end of September from EGP 216.94 billion ($7.02 billion) a year earlier. The official USD/EGP rate is nearly 31.

Interest payments accounted for 60.3 percent of Egypt’s total expenditure. As a result, Egypt’s expenditure surged to EGP 790.86 billion in July-September from EGP 466.42 billion a year earlier.

The rise in expenditure was accompanied by a surge in revenue, which recorded EGP 335.13 billion in July-September from EGP 258.85 billion in the same period a year ago.

Egypt's budget deficit accounted for 6.1 percent of its GDP in FY 2022/2023. However, the country achieved an $882 million surplus in its Balance of Payment (BoP) in the same year.

The government increased its budget deficit estimate to 6.9 percent of GDP for FY 2023/2024, which started on 1 July amid the cascading global economic crises that affected the country's economy.

Egypt’s external debt reached $164.73 billion at the end of June 2023, according to the Central Bank of Egypt.

The country is required to pay $29.23 billion in external debt service in 2024, $19.43 billion in 2025, and $22.94 billion in 2026.