Norris made her statement during the press briefing the fund held on Wednesday to release its flagship Fiscal Monitor Report.
She was responding to a question by Ahram Online about the projected level of external debt in Egypt in light of the challenging economic situation in the country and the IMF’s loan programme with Egypt.
In March, the CBE hiked the key interest rates by six percent and allowed the value of the local currency to be determined by the forces of supply and demand.
Consequently, the Egyptian pound lost over 60 percent of its value against the US dollar since March.
Norris told Ahram Online that Egypt’s external and overall debt is projected to decline beginning FY2024/2025 and onwards.
The IMF has recently expanded its 46-month loan programme for the country, which extends to 2026, to $8 billion from $3 billion. The Fund also completed the first and second reviews of the programme, with the third review scheduled to be completed by the end of June.
Egypt plans to reduce its external debt to below 80 percent of GDP by 2026.
In October, the IMF expected Egypt’s gross debt-to-GDP ratio to reach 92.7 percent in 2023, the highest among emerging and middle-income economies. The Fund also projected Egypt’s gross debt level in October to decline to 88.1 percent in 2024 and 76.4 percent in 2028.
Egypt is committed to repaying $42.3 billion in loans and their services in 2024 against the backdrop of the loans it seeks to secure from international financial institutions.
Recently, the European Union announced over $8 billion for the country, and the World Bank pledged $6 billion in three years to support the country’s budget and private sector.
Responding to Ahram Online’s question about the IMF’s projections for Egypt’s budget deficit in both FY2023/2024 and FY2024/2025, Norris said Egypt’s budget for FY2023/2024 targets through its privatisation programme to produce the primary surplus of 2.5 percent of GDP, including 50 percent of divestment proceeds, to reduce public debt.
As for FY2024/2025, Norris explained that the approved budget increased the primary surplus target to 3.5 percent of GDP, noting that the fund's programme focuses on reducing Egypt's debt by putting the general government debt as a share of GDP on a downward path through continued fiscal discipline.
The IMF stated that Egypt's projected real GDP for FY2023/2024 would remain at three percent before rising to 4.4 percent in FY2024/2025.
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