Egypt targets 5.4% GDP growth, lower deficit and debt in FY26/27 budget

The minister stated that the government sets out an ambitious fiscal plan aimed at boosting investment, strengthening public finances, and expanding social protection.

Deficit reduction and debt strategy

Kouchouk said the new budget is built on expectations of easing inflation to around 9.3 percent, alongside continued efforts to narrow the fiscal deficit and reduce public debt. The overall deficit is projected to decline to 4.9 percent of GDP in the FY2026/2027, down from an estimated 6.1 percent in the current fiscal year, which ends on 30 June 2026.

The budget assumes an average oil price of about $75 per barrel, with energy subsidies expected to fall to around EGP 120 billion in the coming fiscal year.

On public debt, the minister said the government aims to reduce the debt of budget sector entities to 78 percent of GDP by June 2027, while continuing to bring down external debt by $1–2 billion annually. External debt has already declined to approximately $77.5 billion from $78.5 billion, he added. The strategy also targets lowering debt servicing costs to 35 percent of total expenditure over the medium term.

The government is also aiming to generate a primary surplus of 5 percent of GDP in the upcoming budget, compared to nearly 3.5 percent recorded in the first nine months of the current fiscal year, equivalent to about EGP 750 billion.