The Egyptian Minister of Finance, Mohamed Moeit revealed the features of the ministry’s strategy to lower the government debt in the medium term, which aims to reduce the ratio of debt to the GDP to reach 93% in June 2019, and then to 88% in June 2020, and to 80% in June 2022, targeting an annual initial budget surplus of 2% of the GDP and achieve annual growth rates of over 6 % in the medium term.
Moeit explained in a press statement that the ministry that the ministry also aims to reduce external debt to reach 34% of the GDP in June 2019, pointing out that Egypt’s foreign debt ratio to the GDP fell to 36.8% in June 2018, down from 41.1% in June 2017.
On the other hand Deputy Minister of Finance for Fiscal Policies and Institutional Reform Ahmed Kouchouk revealed that, Egypt’s short-term dollar-denominated debt fell $3.25bn to reach around $14bn by the end of 2018
This means that Egypt’s external debt is starting to fall within the safe range, according to IMF estimates of 30-50%.
Furthermore, Moeit confirmed that the ministry has succeeded in reducing the local and external debt ratios to the GDP, recording 97% of the GDP in June 2018, down from 108% of the GDP in June 2017, compared to 103% of the GDP in June 2016.
Moreover, he pointed out that the success of the plan to reduce debt is mainly due to achieving an initial surplus of EGP 4bn in fiscal year 2017/18 for the first time in 15 years, in addition to achieving an economic growth rate of 5.2%.
The minister assured that his ministry has implemented a number of measures and proposals present in the strategy during the past months to limit the increase in the debt service bill and to improve and prolong the structure of government debt.