Egypt's government gross debt to hit 91.4% of GDP in 2021: IMF

Doaa A.Moneim , Wednesday 13 Oct 2021

The International Monetary Fund (IMF) projected Egypt’s government gross debt to hit 91.4 percent of its GDP in 2021, up from the 89.8 percent recorded in 2020.


In its Fiscal Monitor Report that was released on Wednesday, the IMF expected this ratio to decline as of 2022 to record 89.5 percent, then to 78.2 percent in 2025, and then 74.1 percent in 2026.

Moreover, the report predicted Egypt’s general government net debt to jump to 83.5 percent of GDP in 2021, up from the 79.2 percent recorded in 2020.

The government’s net debt to GDP ratio is expected to commence its downturn in 2022 to reach 82.2 percent, then 78.8 percent in 2025, and 68.2 percent in 2026, according to the report.

Additionally, the report anticipated Egypt’s government’s general expenditure to increase slightly to 27.2 percent of GDP in 2021, up from the 27.1 percent posted in 2020, which is below the pre-pandemic levels of 28.3 percent.

Government expenditures are projected to continue declining and are expected to reach 26.7 percent in 2023 and 26 percent in 2026.

On the other hand, Egypt’s government revenues are expected to rise to 19.9 percent of GDP in 2021, up from 19.2 percent in 2020, both of which remain below pre-pandemic levels, which ranged between 20 and 22 percent, according to the report.

However, by 2022, revenues will record 21 percent of GDP and then increase to 21.6 percent of GDP by 2025 and 2026.

The government’s cyclically adjusted balance — which is an estimate of the fiscal balance that would apply under current policies if output were equal to potential — is expected to roll back by 7.6 percent of potential GDP to 4.4 percent by 2026, according to the report.

The government’s primary balance is also expected to remain unchanged from 2020, standing at 1.3 percent of GDP in 2021, before rebounding in 2022 and 2023 to reach 1.7 percent and 2.1 percent respectively.

However, the report expected this ratio to fall back to 2 percent in 2024 and 1.7 percent in 2026

Furthermore, the report projected Egypt’s gross financing needs to hit 36.9 percent of GDP in 2021.

Globally, the report expected the global government debt to GDP ratio to remain at record-high levels — close to 100 percent — in 2021 and to decrease slightly through 2026, explaining that debt buildup has led to a rise in governments’ gross financing needs.

Many low-income developing countries will likely need further international aid and in some cases debt restructuring, according to the report.

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