Egypt’s budget deficit is expected to narrow to 6.8% by the end of the current fiscal year, the IMF said in its latest Fiscal Monitor Report (pdf). This is 0.5 percentage points higher than the IMF’s previous forecast for FY 2021-2022, which penciled in a 6.3% deficit. The deficit stood at 7.3% last fiscal year.

Looking ahead: The Fund’s latest report also sees a wider deficit than was previously anticipated in the coming years. Next fiscal year’s deficit is now expected to narrow to 6.1% (up 0.6 percentage points from the previously-forecast 5.5%), before widening to 7.1% in FY2023-2024. The IMF then expects the deficit to narrow gradually over the following three fiscal years to hit 5.6% in FY2026-2027.

Our primary surplus is now expected to be slightly thinner, coming in at 1.3% of GDP in FY2021-2022, down from a previously forecast 1.7%. The IMF sees our primary surplus picking up in the next fiscal year to record 1.9% of GDP.

On the upside, the IMF sees government revenues coming in higher than previously expected: Revenues are now forecasted to rise to 21.4% of GDP by the end of the current fiscal year in June, marking an upwards revision of 0.4 percentage points. Revenues are expected to more or less hold steady through FY 2026-2027, according to the report.

State spending is also expected to be higher than earlier projections, with the Fund anticipating spending rising to 28.2% of GDP in FY 2021-2022. The IMF had previously expected spending to come in at 27.4% this fiscal year. The report has also revised upwards its projections for state spending for the next four fiscal years.

The country’s debt is going to be a bit higher than expected: Gross debt for FY 2021-2022 is now penciled in at 94.0%, up 4.5 percentage points from the IMF’s October figures. This is slightly higher than last fiscal year’s debt figure, which recorded 93.5% of GDP. However, debt is expected to fall at a faster pace each subsequent year until FY 2026-2027, when it is set to reach 80.7%.

These projections come on the heels of the IMF expecting Egypt to buck the global trend of slowing economic growth, revising upward Egypt’s GDP growth for the current fiscal year by 0.3 percentage points to 5.9% in its April World Economic Outlook report. The economy grew at a 3.3% clip in 2019-2020. A poll of economists by Reuters last week has 2021-2022 growth rising to 5.3% this year, before tempering slightly to 5.2% in 2022-2023 and 5.0% in 2023-2024.