Egypt’s domestic debt falls for first time in 11 years

Egypt’s domestic debt shrank for the first time in more than 11 years during the first quarter of the 2019/2020 financial year.

Separate analysis from Amwal Al Ghad on Tuesday calculated that Egypt has managed to reduce its domestic debt by 2.4 percent to reach 4.186 trillion Egyptian pounds ($264.6 billion) at the end of September from 4.289 trillion pounds at the end of June.

Egyptian domestic debt falls for the first time since the fourth quarter of the 2007/2008 financial year when the debt declined to 685.8 billion pounds at the end of March 2008 from 666.8 billion pounds at the end of June 2008.

Debt continued to rise in the past 11 years to surpass one trillion pounds for the first time in March 2011. According to the central bank’s official data, figures grew even bigger to 2.016 trillion pounds in March 2015, then to 3.052 trillion pounds in December 2016, and later to 4.107 trillion pounds in December 2018.

Egyptian Finance Minister Mohamed Maait said last week that the country is on track to reduce its total debt to a lower-than-expected 83 percent of GDP by the end of the financial year in June, helped by a widening of its primary budget surplus in the last half of 2019.

“We aim to reduce the debt to 83 percent by the end of the financial year, compared to the 89 percent we had (earlier) projected,”

The primary budget surplus widened to 0.5 percent of GDP, or 30 billion Egyptian pounds ($1.91 billion), in the second half of 2019 from 0.4 percent a year earlier, Maait added.

Egyptian government aims to reduce its primary deficit to 2 percent of GDP for the whole of the 2019/2020 financial year.