Egypt’s gross domestic debt climbed to LE1.095 trillion at the end of September, up LE50 billion from June, a monthly bulletin from the Central Bank of Egypt (CBE) said Tuesday.
The rise brings Egypt's debt to 69.8 per cent of its gross domestic product (GDP), an increase officials said was to be expected.
"It is normal that the domestic debts increase because we cover deficit with debts. What counts is [the debt] ratio to GDP," Amina Ghanem, Deputy Minister of Finance for External Relations, told Ahram Online.
The proportion of debt to GDP hit 68.4 per cent in September 2010, following a 1.4 per cent increase between July and September of that year.
"It is an acceptable increase especially in the circumstances," Ghanem added.
The rise in debt is equal to almost 40 per cent of Egypt’s deficit in the 2011-12 financial year.
According to figures, 78.2 per cent of Egypt’s domestic debt is owned by the government, 6.2 per cent by economic bodies and 15.6 per cent by the National Investment Bank.
Government debt rose to LE856.7 billion in September, up a further LE48.6 billion from June. The debt of economic bodie increased by LE 1.6 billion to reach LE67.9 billion in the same period.
The debt of the National Investment Bank climbed a marginal 0.6 per cent to LE171.1 billion, although the status of the bank, created in 1991, is unclear.
The bank's funds come from deposits from social insurance and pension funds. The money was mainly used to finance social and economic projects with a variable track record.
Egypt’s external debt fell 2.6 per cent to reach $34 billion due to falling exchange rates of most currencies borrowing against the dollar, the CBE report said.
The price of servicing Egypt's external debt increased by $211.9 million to reach $1.2 billion.