IMF upgrades Egypt budget projections in its Fiscal Monitor Report

The International Monetary Fund (IMF) said that Egypt’s fiscal position has improved over the past six months, though debt is expected to rise at a quicker pace than before according to Figures in the Fund’s latest Fiscal Monitor Report.

Egypt’s public finances have withstood the test of covid-19 better than previously thought, new projections released by the IMF indicate.

The budget deficit is no longer expected to widen this year: The IMF now sees the budget deficit narrowing to 7.3 percent of GDP by the end of the current fiscal year, compared to 7.9 percent in FY2019-2020.

However, the Fund in October has expected the deficit to climb to 8.1 percent of annual output before falling back in FY2021-2022.

But there will be slower progress over the longer term: The deficit is now forecast to shrink to 4.2 percent  of GDP by the middle of the decade, compared to the 3.8 percent projection the IMF published in October.

The primary surplus will also be bigger than previously thought, coming in at 1 percent of GDP at the end of the current fiscal year. The IMF previously saw the government generating a slender 0.4 percent primary balance.