Latest news with #NerminTahoun

Egypt Independent

Economist says Egypt's debt servicing bill exceeds 50% of public spending

Economic expert Nermin Tahoun said that Egypt's debt servicing bill currently exceeds 50 percent of public spending, which poses a major challenge for the state. She added that the Finance Ministry's announcement of a primary surplus of 3.1 percent of GDP from the July 2024-April 2025 period strongly indicates improved public financial management, and provides greater confidence in the government's ability to adhere to the path of economic reform. This surplus, the highest in Egypt's history, is equivalent to nearly LE600 billion and comes at a highly sensitive time, as the global economy is experiencing inflationary pressures and a decline in capital flows to emerging markets. Tahoun explained that this achievement was made despite a decline in revenues from some vital sectors, such as the Suez Canal and the petroleum sector, while Suez Canal revenues declined by approximately 40 percent during the first quarter of 2025. This reflects the effectiveness of fiscal policies in compensating for the loss by improving tax collection efficiency and controlling public spending, she explained. Tahoun said that this surplus supports the state's ability to finance basic expenditures without the need to borrow to finance the current deficit, contributing to reducing pressure on public debt. While praising the results, Tahoun emphasized that 'achieving a primary surplus is a positive step, but the most important thing is to continue achieving it sustainably.' The government must strike a delicate balance between achieving fiscal discipline and stimulating economic growth, she said, especially since the current growth rate—estimated at between 3.5 and four percent—is still below long-term targets. Tahoun concluded by saying that the focus during the next phase should be on deepening local production, attracting foreign direct investment, and expanding the social protection umbrella to ensure that positive indicators are reflected in improved quality of life, not just overall indicators. Edited translation from Al-Masry Al-Youm