Debt servicing costs consumed more than 96 percent of Egypt’s total budget revenues during the first five months of the 2025/2026 fiscal year, underscoring the heavy strain public borrowing continues to place on state finances, according to the finance ministry’s latest monthly report.
Between July and November, interest payments surged 45.2 percent year on year to nearly one trillion Egyptian pounds, reflecting persistently high borrowing costs despite recent efforts to stabilise the economy and rein in inflation. Over the same period, total public spending rose 32.6 percent from a year earlier to about 1.8 trillion pounds.
The ministry said the government remains committed to strengthening fiscal discipline and reprioritising spending, with a focus on human development and basic public services, even as debt obligations continue to dominate the budget.
Spending on wages and employee compensation increased by 9.5 percent to 263.6 billion pounds, while purchases of goods and services rose modestly by 1.8 billion pounds to 70.6 billion pounds.
Outlays on subsidies, grants and social benefits climbed 28 percent to 270 billion pounds, reflecting continued efforts to cushion households and strategic sectors from economic pressures. Food subsidies rose by 16.5 billion pounds to 58.7 billion pounds, while export subsidies increased by five billion pounds to seven billion pounds. Support for industrial production rose to 3.2 billion pounds, up 1.2 billion pounds from a year earlier.
Additional spending included increases in farmer support, cash transfer programmes such as Takaful and Karama, treasury contributions to pension funds and state-funded medical treatment for citizens.
On the revenue side, total budget revenues increased 33 percent year on year to around one trillion pounds during the July–November period, driven largely by strong growth in tax collections.
Tax revenues reached about 961.6 billion pounds, up 35 percent from the same period of the previous fiscal year. Taxes from sovereign entities rose by 31.5 percent to 227 billion pounds, while revenues from non-sovereign entities climbed 35.6 percent to 734.6 billion pounds.
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Income tax receipts recorded particularly strong growth, rising by 52.7 percent to 277.2 billion pounds. Collections from local wage income increased by 34 percent to 74.7 billion pounds, while taxes on commercial and industrial activities rose 47.3 percent to 28.9 billion pounds. Revenues from non-commercial professions also increased sharply.
Corporate tax revenues jumped 66.1 percent to 167.2 billion pounds, driven by higher payments from private companies and a notable increase in taxes related to the Suez Canal.
Value-added tax (VAT) revenues rose 27.6 percent to 428.3 billion pounds, reflecting higher collections on both goods and services. VAT on goods increased to 237.5 billion pounds, supported by growth in taxes on imported and locally produced items. VAT on services rose more than 50 percent to 57 billion pounds, led by higher receipts from hotels and restaurants, manufacturing services and telecommunications.
Other tax categories also posted gains. Revenues from taxes on locally manufactured goods rose to 83.6 billion pounds, while development fees, stamp duties and taxes on the use of goods and specific services all increased. Property tax revenues climbed 26.2 percent to 181.4 billion pounds, largely due to higher taxes on treasury bill and bond yields.
Taxes on international trade increased by 14.5 percent to 61.1 billion pounds, while other tax revenues benefited from higher receipts linked to movable capital transferred from the central bank.
Non-tax revenues also rose, increasing by more than 12 percent to about 139 billion pounds and accounting for roughly 12.6 percent of total revenues. The rise was driven mainly by higher grants, particularly from government entities.
Despite the improvement in revenues, economists say Egypt’s fiscal position remains under pressure as debt servicing continues to absorb the vast majority of state income, limiting room for development spending and heightening the importance of sustained reforms, growth and lower borrowing costs.
