Egypt says it is not at risk of bankruptcy

Egypt rejects claims that the country is exposed to bankruptcy risk due to its debts and the cost of servicing them during rate rises and inflation. (Shutterstock)

• Cabinet says external debt structure is positive amid rising inflation
• The Cabinet added that Egypt aimed to maintain fiscal discipline and reduce the budget deficit to 5.6 percent of GDP

CAIRO: Egypt’s government has rejected claims that the country is exposed to bankruptcy risk due to its debts and the cost of servicing them during rate rises and inflation.
It also cited a report on the performance of the Egyptian economy from June to November.
The Cabinet said Egypt’s ratio of external debt to GDP was 34.1 percent, below the maximum risk limit of 50 percent.
The report said the structure and diversity of Egypt’s external debt instruments including loans, deposits, issued bonds and short-term credit facilities, were positive.
The Cabinet said that most of Egypt’s external debt was medium and long-term. Around two-thirds of foreign debt was also at fixed interest rates — which mitigates the risks of international rate increases.
It added: “In light of the successive economic crises that the world witnessed during the previous periods, governments all over the world tended to adopt expansionary economic policies to mitigate the consequences of the negative effects of these economic crises on families and companies.
“Such policies led to a significant rise in levels of global indebtedness, which rose to a record 350 percent of the global GDP by the end of the second quarter of 2022.”
The Cabinet added that Egypt aimed to maintain fiscal discipline, reduce the budget deficit to 5.6 percent of GDP, and achieve the first surplus from the state’s general budget permanently at 0.2 percent of the GDP.
These measures would contribute to reducing indebtedness and achieving financial and economic stability for the country’s general budget and ensure safety for current and future generations, said the statement.
The Cabinet statement came as Egypt’s Central Agency for Public Mobilization and Statistics announced on Thursday that the general index of consumer prices rose by 2.5 percent to 140.7 points in November.
The annual inflation rate in November rose to 19.2 percent, compared to 16.3 percent in October, said an agency statement.
The annual inflation rate in urban areas rose during November to 18.7 percent, compared to 16.2 percent in October.
The agency’s statement attributed the rise to prices increase for bread and grain by 52.1 percent, meat and poultry by 30.3 percent, fish and seafood by 38 percent, dairy products and eggs by 40 percent, and coffee and tea by 23.1 percent.
It also cited price increases in tobacco products by 0.3 percent, clothing by 2.1 percent, footwear by 1.3 percent, home furnishings by 2.6 percent, and appliances by 3.1 percent.