Egypt’s primary surplus, budget deficit beat expectations in 2020-2021: Egypt recorded a primary surplus of 1.4% of GDP, or around EGP 93.1 bn, during FY2020-2021, Ittihadiya said in a statement yesterday.

This is comfortably higher than the 0.9% targeted by the government and better than the IMF’s expectations for a 1% primary surplus. Egypt achieved a 2% primary surplus before the pandemic hit. In FY2021-2022, the Finance Ministry expects the country’s primary surplus to increase to 1.5%, before falling to 1.3% the year after.

The budget deficit also narrowed more than expected: The budget deficit reached 7.4% in FY2020-2021, from 8% a year prior. This exceeded the ministry’s initial target of 7.8%, and was mostly in line with the IMF’s 7.3% forecast. Moving forward, the budget deficit is expected to narrow to 6.7% of GDP this fiscal year, before dropping to 6.2% in FY 2022-2023

Revenues outpace spending: Revenues increased by 12% y-o-y (EGP 119 bn), outpacing spending which rose 9% y-o-y, the statement said, without disclosing the figures.

And debt-to-GDP declined: The country's public debt dropped to 90.6% of GDP in FY2020-2021 thanks to the Finance Ministry’s shift to longer tenor debt, which has seen it lengthen the average maturity from 1.3 years before June 2017 to 3.45 years as of June 2021, the statement said.