Egypt to seek soft loans to help finance 2024/25 deficit, finance minister says
The IMF is also pushing Egypt to increase its tax intake in its 2025/26 budget.
CAIRO, Aug 6 (Reuters) - Egypt plans to turn to the local debt market and try new debt instruments as it works to bring down a persistent budget deficit over the coming year, its finance ministry said on Tuesday.
The deficit in the 2023/24 fiscal year, which ended on June 30, was 505 billion Egyptian pounds ($10.3 billion) in a 3.016 trillion pound budget, Finance Minister Ahmed Kouchouk said.
Egypt's fuel subsidies increased by 31% in the 2023/24 financial year to 165 billion pounds, while food subsidies climbed 10% to 133 billion pounds, Kouchouk said.
The increases largely reflected consumer price inflation that hit 27.5% in the year to end-June.
"We are planning to continue relying on the local debt market and are considering new debt instruments and expanding existing tools such as variable rate treasury bonds, local market green bonds and local sukuk," Kouchouk told a news conference.
Egypt hoped to avoid the international debt market apart from tapping a few new markets and seeking bilateral and multilateral support and soft loans. The average length of the country's foreign debt is 13 years "which is very good for us," he said.
Egypt has twice raised fuel prices and increased the price of bread as it grapples with heavy subsidies, steps that were benchmarks in a $8 billion IMF financial programme signed in March.
The IMF is also pushing Egypt to increase its tax intake in its 2025/26 budget.
"Egypt needs tax resources to be able to spend on priority needs, that is a priority reform that we will be discussing at the time of the fourth review," IMF Ivanna Vladkova Hollar said last week.
Total expenditure was 3.016 trillion pounds in 2023/24, while tax revenue was 1.63 trillion pounds and all other revenue 871 billion pounds, Kouchouk said.
Egypt plans expenditure of 3.9 trillion pounds and revenue of 2.6 trillion pounds in the fiscal year that started on July 1, former finance minister Mohamed al-Maait said in March.
