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Thursday, 14 November 2019

Egypt aims to cut debt-to-GDP ratio to 77.5% by 2022: Finance ministry

Doaa A.Moneim , Saturday 17 Aug 2019
Egypt’s finance ministry
File Photo: Egypt’s finance ministry (Photo: Reuters)
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Egypt’s finance ministry is targeting a debt-to-GDP ratio of 77.5 percent by 2020, which would be a lower rate than in 2011.

The debt-to-GDP ratio was reduced from 108 percent by the end of June 2017 to 98 percent in 2018 and to 90.8 percent in 2019, according to a ministry statement released on Saturday.

“We are targeting government debt of 77.5 percent by the end of June 2022, which will put Egypt in the comfort zone in accordance with international standards,” read the statement.

“The government is working on ensuring that annual growth rates are not less than 6 percent, on average, and a sustainable initial annual surplus in a margin of 2 percent until fiscal year 2021/22, based on the significant success of the economic reform programme that has been achieved so far, and the associated structural reforms,” read the statement.

According to the statement, a reduction in the debt burden will provide more resources for human development requirements, including education and health care.

It would also improve the sustainability of public finances and boosting their capacity to cope with any urgent changes in the domestic and global macroeconomic indicators, as well as increasing Egypt’s economic competitiveness through alleviating the pressure on the deposit rate, the ministry said.

It would also enhance private sector investments and create new sustainable job opportunities.

The ministry is aiming to diversify funding sources this fiscal year, and once the deposit rate decreases in Egypt’s banks, funding tools could expand to include long-term ones from the domestic market instead of short-term borrowing, as well as expanding the issuance of both long-term and medium-term bonds rather than treasury bills.

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