Egypt’s five-year credit default swap (CDS) rates dropped to 270 basis points on January 6, the lowest level since 2020, according to the Ministry of Finance. In contrast to the same period in 2025, the price and rates of foreign bonds fell precipitously by 300-400 basis points.
The ministry said in a statement released by its Media Observatory wing that during the first half of the current fiscal year, the debt-to-GDP ratio of budgetary entities continued to decrease in comparison to the same period last year, as both the debt stock and net borrowing ratios decreased as a percentage of GDP. This development was accompanied by a significant drop in risk indicators among investors and in international markets, indicating a better evaluation of Egypt’s economy.
The comment was made in reaction to a media report on public debt that was shown by a specialised Arab satellite channel. The observatory warned that the article could mislead non-specialist viewers and called it unprofessional and misleading.
They also clarified that the report’s chosen data presentation did not provide a complete and accurate picture. Without mentioning the amount of amortisations and debt repayments made over the same period, it concentrated on the volume of fresh issuances of a portion of the domestic debt during the first half of the fiscal year.
The report allegedly gave the false impression that the debt stock increased by the full value of the issuances by excluding other types of debt, especially external debt. The observatory emphasised that this kind of research is flawed since net domestic and external borrowing, not only total issuances, determines changes in the debt stock.
It was also reported that revenues increased by over 30% in the first half of the current fiscal year, outpacing the growth rate of expenditures during the same time frame. Compared to 1.3% at the same period in the previous fiscal year, tax receipts increased by more than 32% year over year, resulting in a primary surplus of around EGP 383 billion, or more than 1.8% of GDP. As a result, the entire budget deficit was stabilised at 4.1% of GDP.
It further stated that because tax filing season, increased tax inflows, and the transfer of surplus profits from public corporations and government bodies to the treasury usually take place between March and June, the second half of the fiscal year normally produces better fiscal performance than the first.
The observatory came to the conclusion that the budget’s ability to meet its goals for the current fiscal year is confirmed by the ongoing positive fiscal results, which are bolstered by strong and diverse economic performance, robust growth in private investment, and exceptionally strong performance in exports of goods and services.