Our Q2 FY 18/19 Egypt debt monitor includes the following:
- Total debt review
- External debt review
- Domestic debt review
- Domestic debt vehicle analysis
- Overview of the government’s medium-term debt control strategy
- Debt sustainability and risk assessment
- Egypt’s debt reached EGP5.8tn (US$326bn) and 125% of GDP as of Q2 FY 18/19, and constitutes a burden on the economy as debt service takes up as much as 48% of the state budget for FY 19/20.
- External debt stands at US$96.6bn as of Q2 18/19 and is mostly long term, denominated in US$ and owed to multilateral organisations and Arab countries. It represents 37% of GDP as of Q2 2018/19.
- Debt service for external debt is heavy and the Ministry of Finance presents a front-loaded repayment plan, with payment dues peaking in FY 19/20.
- Domestic debt is EGP4.1tn (US$229bn) as of Q2 18/19, and represents 70% of total debt and 88% of GDP. Its share of GDP is slowing down.
- Debt is transitioning to longer tenors to reduce debt cost, and the yield curve is starting to invert.
- The Ministry of Finance’s medium-term debt control strategy for FY 19/20, 20/21, 21/22 aims at decreasing the cost of issuing government debt securities, reducing refinancing risk and deepening the market with new regulations, reforms and new instruments.
- The IMF evaluated Egyptian debt as sustainable with moderate risks, while public debt/GDP ratio remains at 102%, above the 50% benchmark for EM.
- Total debt is projected to fall to 95% by FY 2022/23 from 125% in FY 18/19, conditional upon continuing fiscal consolidation and favourable debt dynamics.