Egypt’s external debt reaches 35.1% of GDP at end-2018, but still within safe limits: CBE

Hossam Mounir
3 Min Read

The Central Bank of Egypt (CBE) said Egypt’s external debt remains within safe limits, in line with international standards.

In the external situation report of the Egyptian economy, the CBE pointed out that the foreign debt reached 35.1% of GDP at the end of December 2018, while the average foreign debt in the European emerging markets (EMs) stands at 61.4% of GDP, and 41.9% in the Commonwealth member countries.

Short-term foreign debt recorded about 10.7% of total external debt until the end of 2018, while it reached 20.5% in European EMs and 8.4% in Commonwealth member countries.

According to the CBE, the debt service ratio, a country’s debt service payments (principal + interest) to its export earnings, amounted to 23.2% at the end of last December, while it reached 44.4% in European EMs, and about 29% in the Commonwealth.

The government accounts for 49.8% of the total foreign debt, as its debts rose by about $400m last year to reach $48.1bn. While the CBE’s debt rose to $28.2bn, accounting for 29.2% of the total external debt.

According to the CBE, the banking sector’s debt amounted to about $7.7bn, representing 7.9% of the total external debt, while the other sectors’ debt recorded about $12.6bn, representing about 13.04%.

The CBE disclosed that the foreign debt is due to be paid in the second half (H2) of 2019 will reach about $14.5bn, including interest of approximately $1.8bn.

It pointed out that the external debt payments include $1.48bn for the Paris Club, $1.69bn for international institutions, and $387.36m of interest on the Europe-denominated bonds put forward by the Ministry of Finance in international markets during the last period.

The debt also includes $2.07bn in deposits payable to Kuwait, $5.25bn in deposits’ instalments to Saudi Arabia, $78.2m in interest on UAE deposits, and $28.1m in interest on government bonds issued in 2010.

According to the CBE, Saudi Arabia is Egypt’s top lending country, with debts amounting to $8.7bn, of which $7.5bn are deposits with the CBE and $1.187bn in other debt forms.

The UAE came second with $6.78bn debts, including $5.9bn in deposits with the CBE and $882m in other debt forms.

Egypt owes $4.998bn to Kuwait, including $4bn in deposits with the CBE and $999m in other debts.

Egypt’s external debt to China rose to $3.731bn at the end of December 2018, while Germany’s receivables amounted to $2.926bn, and Japan to $2.258bn.

Debts owed to France amounted to $1.326bn, the United States to about $1.045bn, Spain $261.7m, Denmark $77.9m, Austria $62.9m, Italy $58.4m, and the Netherlands to $50.6m.

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