Egypt’s external debt dropped in the first quarter, the CBE said

According to recent data issued by the Central Bank of Egypt (CBE), Egypt’s external debt decreased slightly in September 2021, the end of the first quarter (Q1) of the current fiscal year (FY) 2021/2022, to $137.4 billion, down from $137.8 billion at the end of FY 2020/2021.

Egypt’s external debt increased significantly in the first half (H1) of FY 2020/2021, reaching $137.8 billion, up from $129.1 billion in H1 of FY 2019/2020.

Egypt’s total long-term debt climbed to $125.9 billion by the end of Q1 of the current fiscal year 2021/2022, up from $124.1 billion at the end of FY 2020/2021.

However, the country’s total short-term debt fell to $11.4 billion at the end of Q1 FY 2021/2022, down from $13.7 billion at the end of FY 2020/2021.

According to the CBE, general government debt climbed to $82.6 billion by the end of Q1 of FY 2021/2022, up from $80.4 billion the previous year.

According to the International Monetary Fund, Egypt’s government gross debt increased to 91.4 percent of its gross domestic product (GDP) at the end of 2021, up from 89.8 percent in 2020. (IMF).

According to the IMF, this ratio will fall to 89.5 percent in 2022, 78.2 percent in 2025, and 74.1 percent in 2026.

By implementing a medium-term debt management strategy, Egypt’s government hopes to reduce the public debt-to-GDP ratio to 84 percent in FY 2022/2023 and 79 percent in FY 2023/2024.

The plan is based on lowering debt servicing costs, extending loan terms, and strengthening government security in markets to broaden the investor base and supply the necessary liquidity to finance the budget.

The external debt trajectory would be defined by predicted cash inflows to the country, which will be set on a downturn route per year, up to a maximum of 37 percent of GDP, according to the strategy.

Over the next four years, the policy intends to reduce the public debt-to-GDP ratio to around 70%, impose a cap on loans obtained through external entities, and reduce the external debt-to-GDP ratio to around 30% in the medium term.

A portion of the debts will be settled by swapping them for distinctive state-owned assets.
For the next four years, the goal is to reduce public debt by EGP 100 billion every year.