Egypt’s five-year credit default swap (CDS) prices fell below 270 basis points on 6 January, marking their lowest level since 2020, the Ministry of Finance announced. At the same time, the cost and yields of the country’s international bonds declined sharply, falling by between 300 and 400 basis points compared with the same period last year.
The ministry’s Media Observatory said the development reflects improving investor confidence and a positive reassessment of Egypt’s economic outlook. Both the debt stock and net borrowing ratios declined as a percentage of gross domestic product (GDP), contributing to a continued reduction in the debt-to-GDP ratio of budgetary entities during the first half of the current fiscal year compared with the same period in 2025.
The statement came in response to a media report aired by a specialised Arab satellite channel on public debt, which the observatory described as unprofessional and inaccurate, warning that it could mislead non-specialist viewers. The ministry said the report relied on a selective presentation of data that failed to capture the full fiscal picture.
According to the observatory, the report focused narrowly on new issuances of domestic debt during the first half of the fiscal year, without taking into account amortisations, repayments, and other forms of debt, particularly external debt. This gave the misleading impression that the debt stock increased by the full value of new issuances. The ministry stressed that changes in the debt stock are determined by net domestic and external borrowing, not by total issuances alone.
Fiscal data for the first half of the current fiscal year showed strong revenue growth. Total revenues increased by more than 30 percent, outpacing the growth in government expenditures. Tax revenues rose by over 32 percent year-on-year, generating a primary surplus of nearly EGP 383 billion equivalent to more than 1.8 percent of GDP up from 1.3 percent in the same period last year. This helped stabilise the overall budget deficit at 4.1 percent of GDP.
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The observatory highlighted that the second half of the fiscal year typically delivers stronger results than the first, driven by the annual tax filing season, higher inflows from taxes, and the transfer of surplus profits from public companies and government entities to the treasury, which usually occurs between March and June.
The ministry attributed the improved fiscal position to a combination of strong and diversified economic performance, robust private investment growth, and very strong performance in merchandise and services exports. These factors, it said, have strengthened Egypt’s ability to meet its budgetary targets for the current fiscal year.
Financial analysts welcomed the CDS and bond movements as indicators of growing investor confidence in Egypt’s fiscal management. Lower CDS spreads signal a reduced perception of credit risk, while declining bond yields reflect increased demand from international investors. Observers noted that such developments could further support the government’s efforts to finance infrastructure projects, maintain fiscal stability, and promote sustainable economic growth.
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The Finance Ministry’s statement underscores the importance of accurate and comprehensive reporting on public debt and fiscal performance. By providing a clear picture of net borrowing, repayments, and overall fiscal management, the ministry aims to reinforce confidence among domestic and international investors while countering misinformation that could create unnecessary market anxiety.
The continued decline in CDS prices, along with falling bond yields and solid revenue growth, reflects Egypt’s strengthened economic fundamentals and highlights the government’s commitment to prudent fiscal policies, sound debt management, and sustainable growth.
