Egypt aims to reduce public debt to GDP ratio to 79% in FY2023/24 – minister

Egypt aims to reduce public debt to GDP ratio to reach 87 percent in the 2020-2021 financial year, 84 percent in the 2022-2023 year, and 79 percent in the 2023-2024 year, its finance minister said on Monday.
Speaking before the House of Representatives, Mohamed Maait reviewed his ministry’s efforts to implement a medium term (2018-2020) strategy.
Maait said the strategy focuses on reducing debt services, prolonging its period, and improving governmental security in markets to expand the investors’ base that will, in turn, provide the required liquidity to support the budget.
According to this strategy, the external debt trajectory will be set in accordance with the expected cash inflows to the country to a maximum of 37 percent of GDP, which will be put on a downturn path per year, the minister added.
It also targets lowering external debt to GDP ratio to below 30 percent over the medium term, he said.
In addition, the strategy aims at reducing public debt to GDP ratio to around 70 percent over the coming four years and putting a cap on loans obtained through external bodies over the same period, he added.
Maait also said the strategy includes settling a portion of debts through exchanging them with unique state-owned assets. The aim is to reduce public debt by 100 billion Egyptian pounds ($6.3 billion) annually for the coming four years.
Over the medium term, Egypt’s budget initial surplus is expected to reach 0.6 percent of GDP in the 2020/2021 financial year, the budget deficit to GDP ratio 7.8 percent, and the public debt to GDP ratio 88 percent.
The finance ministry seeks to lower the budget deficit gradually to 6.5 percent in the 2020/2021-year, 5.3 percent in the 2022/2023 year, and 4.6 percent in the 2023/2024 year.
Maait said that his ministry aims to restore the budget’s initial surplus to pre-pandemic levels, at two percent of GDP, over the medium term.