The Central Bank of Egypt (CBE) has released its monthly report, revealing a $634 million reduction in Egypt’s external debt during the fourth quarter (4Q) of the fiscal year 2022/23, bringing the total to $164.7 billion as of June 2023, compared to $165.361 billion in the third quarter (3Q) of 2023.
The report details that the external debt increased by $9 billion over the fiscal year 2022/23, reflecting a growth rate of 5.8% compared to the previous year (2021/22). This increase was attributed to increased net borrowing from loans and facilities, amounting to approximately $8.9 billion, and the strengthening of most borrowed currencies against the US dollar, totaling about $147.9 billion.
The CBE has noted that the ratio of the external debt balance to GDP stood at approximately 40.3% in June 2023, indicating compliance with international standards’ safe limits.
Furthermore, the burden of external debt service decreased to about $25.4 billion during the fiscal year 2022/23, down from $26.3 billion in 2021/2022. This decline resulted from a reduction in instalments paid, totaling around $18.4 billion, and an increase in interest payments, amounting to approximately $7 billion.
The central bank disclosed that it made interest and installment payments for external debts totaling $25.5 billion during the fiscal year 2022/2023, specifically from July 2022 to June 2023.
The debt service burdens were distributed as follows: $4.784 billion in the first quarter of 2022/2023, $7.154 billion in the second quarter, $5.835 billion in the third quarter, and $7.644 billion in the fourth quarter.
During these respective quarters, installment payments were as follows: $3.229 billion, $5.843 billion, $3.734 billion, and $5.646 billion. Interest payments for the first, second, third, and fourth quarters amounted to $1.555 billion, $1.311 billion, $2.101 billion, and $1.997 billion, respectively.
The report also provides a breakdown of the external debt by creditor category and maturity structure. It revealed that long-term debts accounted for 88% of the total external debt balance in June 2023, reaching $144.8 billion. The remaining 12% was attributed to short-term debts, amounting to $19.9 billion.
Among long-term debts, multilateral institutions, such as the World Bank and the International Monetary Fund (IMF), held the largest share at 38% of the total long-term debts, equivalent to $54.8 billion. Bilateral creditors, such as China and Saudi Arabia, represented the second-largest share at 32%, totaling $46.6 billion. International bonds constituted 16% of the total long-term debts, or $23.6 billion, while the remaining 14% was held by other creditors, such as banks and suppliers.
The report emphasized that Egypt’s net international reserves increased by $6.6 billion during the fiscal year 2022/23, reaching $51.9 billion in June 2023, sufficient to cover approximately 10 months of Egypt’s merchandise imports. This increase was attributed to factors including improved tourism revenues, remittances from Egyptians abroad, foreign direct investments, and portfolio inflows.
In conclusion, the report highlighted that Egypt’s external position remains robust, despite the challenges posed by the COVID-19 pandemic and its impact on global trade and financial markets. Egypt’s external debt indicators are reported to be within acceptable levels, reflecting the country’s capacity to meet its external obligations.
