Egypt aims to keep debt-to-GDP ratio below 80% by ’27

Egypt is implementing a comprehensive strategy to improve public debt management with the aim to reduce the debt ratio of budgetary agencies to less than 80 per cent of GDP by June 2027, Finance Minister, Mohamed Maait, announced on Thursday.

For the first time, a debt ceiling for budgetary agencies has been set at EGP 15.1 trillion, representing 88.2 per cent in the new fiscal year, compared to 96 per cent in the 2022–2023 fiscal, Maait said.

The debt ratio is expected to drop to 90 per cent by the end of June 2024, with the ceiling only surpassable in cases of national emergencies, pending approval from the President, Cabinet, and Parliament.

In an effort to stimulate productive and export activities, the government is injecting necessary liquidity. This includes bearing the interest rate differential of EGP 120 billion to finance facilities for productive sectors, according to Maait.

Additionally, a ceiling has been set for guarantees issued by the Ministry of Finance, with oversight on the volume of sovereign guarantees issued and requested.

The ministry is reviewing all requested guarantees, negotiating their terms, and is working to reduce the sovereign guarantees to GDP ratio starting from the next fiscal year.