Meanwhile, Egypt’s total external debt increased by 11.6 percent by the end of FY2020/21 to post $137.9 billion, compared to the end of FY2019/20.

The CBE’s data also showed that Egypt’s external debt to GDP ratio inched up in to 34.2 percent, which is within the safe limits as per international standards.

In FY2020/21, Egypt’s debt service recorded a total of $15.8 billion, $11.7 billion of which were repaid in loan instalments, while $4.1 billion were paid out in interest, according to the CBE.

Regarding the performance of the balance of payments, Egypt managed to attain an overall surplus of $11.9 billion compared to an overall deficit of $8.6 billion posted in FY2019/20 despite the severe consequences of the COVID-19 pandemic, according to the CBE.

In this regard, the CBE said that this surplus was achieved despite an increase in the current account deficit that reached $18.4 billion in FY2020/21, up from the $11.2 billion recorded in the previous year, due to the increase of the non-oil trade balance deficit and the decline in service balance surplus.

Accordingly, Egypt’s non-oil trade deficit jumped by 16.7 percent to reach $42.1 billion, up from $36 billion recorded in FY2019/20.

Additionally, the service balance surplus significantly declined in FY2020/21 — by 42.9 percent — to $4.9 billion, down from the $9.9 billion recorded in FY2019/20, the CBE’s data showed.

Meanwhile, the investment balance deficit edged up by 9.2 percent in FY2020/21 to reach $12.4 billion, up from the $11.4 billion recorded in FY2020/21.

On the other hand, the CBE’s data demonstrated that Egypt’s expats remittances rose by 13.2 percent in FY2020/21 to post $31.4 billion, up from FY2019/20’s $27.8 billion.

Furthermore, Egypt’s oil trade balance surplus climbed to $6.7 billion, compared to a total deficit of $421 million in FY2019/20, fuelled by the increase in country oil exports to $8.6 billion, while oil imports went down to the same level to record $8.6 billion, according to the CBE.

For financial and capital transactions, the data showed that foreign direct investment (FDI) inflows into Egypt dropped in FY2020/21 to $5.2 billion, down from the $7.5 billion recorded in FY2019/20, affected by the FDI decline globally due to the pandemic.

On another front, investments in Egypt’s equity portfolio improved in FY2020/21 to record an inflow of $18.7 billion, compared to investment outflows of $7.3 billion in FY2019/20, according to the CBE.

In an interview published on Ahram Online in December, Vitor Gasper, the head of the Fiscal Affairs Department at the International Monetary Fund (IMF), said that the COVID-19 pandemic has disrupted the declining trend of Egypt’s debt-to-GDP ratio since 2016/17, expecting public debt to return to a downward trajectory in the current FY2021/22 as growth rebounds.

He also added that a sustained reduction in public debt will require renewed reform momentum to support continued strong growth and that a comprehensive structural reform agenda is essential to help foster private sector development and unleash Egypt’s considerable growth potential.