Despite reaching all-time high, Egypt’s external debt is within safe levels
Inflows of foreign currency debt were spent on infrastructure, health care and overhaul of shantytowns across the country. However, Egyptian banks’ net foreign liability position stands out as a risk.
With Egypt’s external debt reaching an all-time high at $137.85 billion in June, up from $134.84 billion in March, analysts call for more focus on public investment to accelerate economic growth in the coming years.
The World Bank report titled “International Debt Statistics 2022” said the external debt stock of the two largest borrowers in the Middle East and North Africa region — Egypt and Morocco — rose by 14% and 19%, respectively, in 2020.
However, despite the unprecedented levels of foreign debt, a number of analysts weighed up Egypt’s strong potential to repay its debt, arguing that the short-term slice of external debts stands at around 9.8% of the gross debt.
Moreover, it is the effectiveness of using the foreign currency inflows that should matter, Hanan Ramses, an economic expert at Cairo-based El-Horreya Brokerage, said.
