Flash Report /

Egypt Debt Monitor 1Q2019/20: Debt falls, driven by accumulation slowdown

    Al Ahly Pharos Securities Brokerage
    30 January 2020

    Total Egyptian debt stock declines for the first time since 2008. Total debt stock fell to EGP 6.0 tn in 1Q2019/20, down from EGP 6.1 tn in 4Q2018/19, as domestic debt fell 2.3% QoQ (the first quarterly decline since 1Q2008/09), offsetting the 0.6% QoQ growth in external debt. The bulk of the debt stock remains owed by the government which holds 79% of external debt and 87% of domestic debt. 

    Total debt fell to 96% of GDP in 1Q2019/20, down from 104% of GDP in 1Q2018/19. The fall is justified both by nominal GDP growth and total debt decline. It is notable that the first quarter of every year reflects generally the lowest debt-to-GDP ratio as debt accumulates through the year over the same annual GDP. 

    Accordingly, we see the total debt ending FY2019/20 at 112% of GDP and EGP 7.2 tn, down from 115% of GDP in FY2018/19. Along with a slower debt accumulation rate to bring down the debt-to-GDP ratio to 108% of GDP by 2023.

    In our attached Debt Monitor for 1Q2019/20 you will find:

    • Total Debt Review
    • External Debt Review
    • Domestic Debt Review 
    • Debt Service and public debt review
    • Treasury and funding of debt
    • Debt Adequacy ratios