Egypt’s budget deficit to reach 10.7% of GDP in FY2023/24: IMF

CAIRO - 15 October 2023: The International Monetary Fund (IMF) predicted that Egypt’s budget deficit to be 10.7 percent of GDP in 2024 up from an estimated 4.6 percent in the previous year. This came in the IMF’s Fiscal Monitor Climate Crossroads: Fiscal Policies in a Warming World Report.

The IMF also expects government spending to increase to 28.9 percent of GDP in 2024, up from an estimated 22.8 percent last year. The IMF also forecasts that government revenues will stay at 18.1 percent for the second year in a row.

The report predicts that the government's primary balance to record 1.5 percent of GDP in 2024 down from the 2.3 percent recorded in 2023.

As for Egypt’s gross debt, the Fund estimates that it will shrink from 92.7 percent that was recorded in 2023 to reach 88.1 percent in 2024.

“To navigate these challenges, countries with limited fiscal space should build tax capacity to mobilize revenues and improve spending efficiency. Policies should encourage the private sector to play an increasing role in financing and investing in climate actions,” the IMF advised in the forewords of the report.

According to the IMF, the report it published takes stock of mitigation policies across countries and presents the trilemma facing policymakers of balancing between achieving climate goals, debt sustainability, and political feasibility.