FY25/26 kicks off with debt service surpassing total state revenue

Egypt’s spiraling debt crisis intensified in the first four months of the 2025/2026 fiscal year, as interest payments surged past total state revenues—a stark signal of a fiscal model under immense strain.

The Ministry of Finance monthly report for November revealed that interest payments on public debt climbed to 899.1 billion Egyptian pounds ($29 billion) between July and October, outpacing total government revenue, which stood at 864 billion pounds during the same period.

Finance Minister Ahmed Kouchouk, speaking to Al Manassa, had already sounded the alarm in August, warning that debt servicing was consuming the majority of Egypt’s budget revenues for the 2024–25 fiscal year, pushing the overall deficit to nearly 1.2 trillion pounds.

The monthly report also confirmed the deepening imbalance: interest payments are now the largest single expenditure in the state budget.

The Central Bank of Egypt began cutting interest rates in April to lower borrowing costs, enacting three reductions—the last in August—which brought the lending rate down to 24%. But while the monetary easing offered temporary relief, surging inflation in the final quarter of the year curtailed any hopes of further cuts in November.

Economists argue that the convergence of ballooning debt service and sluggish revenue growth raises urgent questions about the viability of Egypt’s fiscal architecture—particularly amid growing pressure from international creditors and escalating domestic social needs.