Egypt’s Foreign Debt Climbs to $168 Billion in Fourth Quarter of 2023
In a recent report by Egypt’s planning ministry, it was revealed that the country’s foreign debt increased by $3.5 billion in the fourth quarter of 2023, reaching a total of $168 billion. This marks a significant rise from the $164.5 billion recorded at the end of September, representing 42.4 percent of the nation’s gross domestic product. Notably, 81 percent of this debt is categorized as long-term.
Investing in State-Driven Projects
Over the last decade, Egypt has been on a borrowing spree, significantly increasing its external debt as it invests heavily in state-driven projects. This financial strategy was highlighted by the recent securing of an $8 billion economic support package from the International Monetary Fund.
Positive Economic Projections
Despite the growing debt burden, Egypt’s Finance Minister Mohamed Maait projected a GDP growth of 2.8 percent in the fiscal year ending in June 2024, with expectations of acceleration to 4.2 percent in the following year. These figures align with the IMF’s forecast of 3 percent GDP growth for the calendar year 2024, indicating optimism about Egypt’s economic trajectory.
Surpassing Financial Targets
In April, Maait noted that despite global and regional economic crises, Egypt has seen financial indicators surpass budget estimates and targets over the past nine months of the fiscal year 2023-2024. The country’s economy has received international recognition for achieving better-than-expected performance metrics.
Efforts to Boost Economy
Maait highlighted the significant improvements in non-tax revenues and tax revenues, achieved without imposing new burdens on citizens or investors. The country’s ongoing efforts to boost its economy include dialogues with over 2,000 investment institutions annually, facilitated by the Ministry of Finance’s Investor Relations Unit.
Addressing Economic Concerns
The ministry issues monthly performance data to provide foreign investors with precise economic information, including details about debt levels, deficits, and primary surpluses. A simplified guide on various incentives, including tax advantages, aims to alleviate concerns and address potential economic risks.
Stabilizing Inflation Rates
Data released by Egypt’s Central Agency for Public Mobilization and Statistics showed a slowdown in the country’s urban consumer price inflation rate to 33.1 percent in March from 36 percent in February. Additionally, month-on-month prices rose by 10 percent in March, down from 11.4 percent in the previous period, following the central bank’s decision to hike interest rates and shift to an inflation-targeting regime.