Egypt's total external debt jumped to $134.8 billion in the third quarter of FY2020/2021, which concluded in June, up from $$129.1 billion recorded in Q2 of the same fiscal year, and $111.2 billion in the same quarter of FY2019/2020, according to data published by the Central Bank of Egypt (CBE) on Sunday. The data showed that Egypt's total long-term debt edged up to $121.5 billion in Q3 of FY2020/21, up from $117.2 billion in the previous quarter and about $1 billion in the same quarter of FY2019/20. On Egypt's short-term debt, the data revealed that its total increased in Q3 of FY2020/21 to $13.2 billion, up from $11.9 billion in the previous quarter and $10.3 billion in the same quarter of FY2019/20. In its press briefing held in June on the second and final review of Egypt's stand-by agreement (SBA) programme, the International Monetary Fund (IMF) lauded the medium‐term revenue strategy adopted by the government and its medium-term debt strategy as key instruments for lowering the high public debt and gross financing needs, while creating space for priority spending amid the COVID-19 challenge. Egypt and the IMF have worked hand-in-hand to draft a medium-term revenue strategy (MTRS) that aims to mobilise the country's revenues, through which revenues would increase by 2 percent of GDP over four years. The strategy is expected to support Egypt's budget targeted surpluses and to create room for priority spending on health, education and social protection. Egypt managed to bring down the external debt to GDP ratio by 18 percent in the two years preceding the pandemic – which is the fastest debt reduction of this magnitude recorded by all countries, according to Minister of Finance Mohamed Maait. Maait also said that despite the negative implications of the pandemic, Egypt managed to contain central government debt levels below 90 percent of the GDP. "If not for COVID-19, the debt-to-GDP ratio would have declined to 82.8 percent in June 2021 and to 76.2 percent in June 2022," according to Maait. He added that the finance ministry is working to meet the requirements to make domestic-currency debt eligible to be settled through Euroclear in order to open the domestic market to a larger audience of foreign investors, saying such a process is expected to be finalized before the end of FY2020/21. Egypt's real GDP growth is expected to approach pre-pandemic levels in the current FY2021/22 to reach 5.4 percent, after it slowed down to 2.8 percent in FY2020/21.
