Egypt’s Finance Minister Amr El-Garhy told MPs on Monday that the country’s total public debt will continue to climb from the current figure of EGP 3.4 trillion (approximately $190 billion).
“We are facing a total debt with a very high debt service,” El-Garhy told MPs during a session held to discuss a report on the 2018/19 draft budget drawn up by parliament's budget and planning committee.
According to official statistics from the Central Bank of Egypt (CBE), the country’s gross domestic product (GDP) by market prices in fiscal year 2016/17 has reached EGP 3.47 trillion, with the public debt increasing to nearly 100 percent of the GDP.
El-Garhy said Egypt is facing a high debt service after going through a period where the country's workforce was at a standstill, with a growth of 1.5 percent and a rise in population of 2 million people yearly.
The minister said that by the end of 2010, Egypt faced a high debt service amid an excessive consumption of fuel and an overpriced currency.
He added that the January 2011 revolution led to a depletion of foreign reserves, which were set at $36 billion before the uprising.
“Throughout this period, the debt accumulated in the drainage, electricity, and petroleum sectors,” he said.
El-Garhy also said that “the world rates us better than we rate ourselves, and the presence of investors is a proof," adding that "if we hadn't set the interest rate at 50 percent, no one would have approached us.”
The minister added that the country witnessed an uninterrupted rise in the budget deficit for the first time from 11 percent to 17 percent.
“This year, however, we've seen the budget deficit drop under 11percent, and we’re aiming to see it continue to drop to under 8 percent,” he said.
According to official statistics from the CBE, the country’s external debt currently stands at $82.9 billion, up from $79.03 billion at the end of last fiscal year.
For the past couple of weeks, parliament has been discussing the country's new state budget for fiscal year 2018/19.
Valued at EGP 1.412 trillion, Egypt’s 2018/19 budget targets a GDP growth of 5.8 percent, up from 5.2 percent in the current fiscal year, a budget deficit of 8.4 percent of GDP, 88 percent public debt, and a 2 percent primary budget surplus, according to statements by the finance ministry last April.
El-Garhy said the new budget targets expenditure of EGP 1.41 trillion, up from EGP 70 billion in the current budget, and state revenues of EGP 989 billion.