Economy Egypt external debt makes record drop By Edmund Bower July 23, 2024, 10:06 AM Alamy Egypt's external debt fell from a record high of $168bn in December to $154bn at the end of May 5-month drop of 8.4% UAE debt swap helped Foreign reserves boosted Egypt’s external debt decreased by over $14 billion between December 2023 and May 2024, the steepest drop on record according to its Central Bank (CBE). External debt fell from a record high of $168 billion at the end of December to $154 billion at the end of May, a decrease of 8.4 percent. The drop followed the disbursement of $24 billion in fresh dollars and an $11 billion debt swap deal with the UAE between February and April. This was part of a deal with Abu Dhabi sovereign wealth fund ADQ to develop the area of Ras El Hekma on the north coast. NewsletterGet the Best of AGBI delivered straight to your inbox every week NewsletterGet the Best of AGBI delivered straight to your inbox every week In June, the CBE’s foreign reserves hit an all-time-high of $46 billion, up $300 million compared to the previous month. It was an increase of a third year-on-year compared to the nearly $35 billion registered in June 2023. The CBE also cited a trebling of “foreign currency resources in the local market”. A previous doubling of remittances since it devalued the Egyptian pound in March was linked to the foreign liquidity boost from the Ras El Hekma deal. Various ratings agencies adjusted their economic outlook for Egypt afterwards, with Moody’s revising its outlook up from “stable” to “positive” in March. Egypt seeks to treble foreign direct investment to $30bn IMF postpones $820m Egypt loan meeting Egypt pays $1.3bn arrears to foreign oil and gas companies Egypt’s debt obligations have greatly increased under the current administration. It has prioritised expensive megaprojects, including the construction of a new capital city, and state interventions to maintain the exchange rate of the Egyptian pound. Last year Egypt’s external debt-to-GDP ratio reached 43 percent whilst total debt-to-GDP reached over 95 percent. The government has said it aims to reduce this to less than 80 percent by 2027. It has instituted a series of austerity measures, including raising the price of subsidised bread for the first time in decades. Last Wednesday finance minister Ahmed Kouchouk reported that Egypt’s budget deficit narrowed to EGP 505 billion ($10.4 billion) in 2023/24. That compared to EGP 610 billion the previous financial year. Its primary surplus increased from EGP 164 billion to EGP 857 billion. Register now: It’s easy and free AGBI registered members can access even more of our unique analysis and perspective on business and economics in the Middle East. Why sign uP Exclusive weekly email from our editor-in-chief Personalised weekly emails for your preferred industry sectors Read and download our insight packed white papers Access to our mobile app Prioritised access to live events Register for free Already registered? Sign in I’ll register later
