Egypt’s debt likely to fall 74% of GDP in FY2023: IMF

Egypt’s debt is expected to decline around 74 percent of the gross domestic product (GDP) within the financial year 2022/2023 given the implementation of the economic reform programme, The International Monetary Fund (IMF) said on Saturday.

The figure is expected to be driven by the recovery of tourism, construction, expansion in the gas extractives and investment sectors and proceeding with the implementation of strong structural reforms.

In its documents released on Saturday on the fourth review of Egypt’s Extended Fund Facility arrangement, the IMF said that the country’s economic growth is still expected to reach 6 percent in the medium term.

Meanwhile, Egypt’s inflation rate is expected to range between 13 and 14% by the end of the current fiscal year, the IMF added.

Monetary policy remains anchored by the medium-term objective of bringing inflation to single digits. The recent pick-up in headline inflation reflected temporary increases in food and energy prices, but a restrictive monetary policy stance has helped to reverse the increase and keep core inflation well anchored.

The authorities have taken important steps to deepen the foreign exchange market and allow greater exchange rate flexibility, including by eliminating the repatriation mechanism.

While the outlook remains favorable, a more difficult external environment poses new challenges as global financial conditions have tightened.

Egypt has successfully weathered recent capital outflows, but consistent policy implementation will be essential to further strengthen policy buffers, including by containing inflation, enhancing exchange rate flexibility, and reducing public debt.

Source: MENA