Egypt’s foreign debt reaches $60bn

Egypt’s external debt has increased by 7.8 per cent, reaching approximately $60 billion by the end of the first quarter of the current financial year 2016/17, official sources at the Central Bank of Egypt revealed yesterday.

During the last quarter of the financial year 2015/2016, April to June 2016, Egypt’s foreign debt reached $55.764 billion.

The Egyptian financial year starts early July and lasts until the end of June of the following year.

Egypt’s debts during the first quarter of the last fiscal year 2015/16 amounted to $46.148 billion, $14 billion lower than the current financial year.

Debts to the foreign oil companies represent a massive share of the country’s total external debt, which amounted to $3.4 billion last June. The government paid $100 million accumulative arrears owed to foreign companies in 2015/2016.

According to the Central Bank’s official data, Egypt’s domestic public debt reached 2.758 trillion Egyptian pounds ($153.2 billion) by the end of the first quarter of the current financial year. By the end of the last financial year, domestic debt amounted to 2.619 trillion Egyptian pounds ($145.5 billion).

Since the beginning of last year, Egypt has embarked on a plan to introduce a number of fiscal reforms, including fuel subsidy cuts that increased prices by up to 78 per cent, as well as imposing new taxes to ease a growing budget deficit that is currently estimated at 12.2 per cent of GDP.

Economists have described the Egyptian government’s external debt as “unprecedented”, warning of a future aggravating financial burden. They pointed out that the government’s approach of attracting investments based on receiving loans from international institutions is not a guarantee towards eventually paying back these loans, stressing that the government must implement real “game-changing” reforms.