The domestic public debt of Egypt reached EGP 4.1049tn at the end of December 2018, against EGP 3.887tn at the end of September 2018, up by EGP 220bn (5.66%), according to the Central Bank of Egypt.
The CBE said in its monthly report on Tuesday that the domestic debt reached 78.2% of GDP. CBE added that this debt includes 85.3% owed by the government, 8.3% owed by public economic authorities, and 6.4% owed by the National Investment Bank.
According to the CBE, the net government domestic debt amounted to EGP 3.50tn at the end of December 2018, an increase of EGP 383bn compared to December 2017.
The net debt of public economic authorities amounted to EGP 340bn at the end of December 2018 with an increase of EGP 22.3bn compared to December 2017, while the net debt of the National Investment Bank reached EGP 263.1bn, with an increase of EGP 6.1bn compared to December 2017.
Moreover, Egypt’s external debt rose to $96.6bn at the end of 2018, compared to $82.8bn in 2017, an increase of 4.3%.
According to the draft budget submitted in April 2019, in the 2019-2020 (July-June) fiscal year, Egypt will borrow EGP820.7 billion, 26% higher than the volume of borrowings in the 2018-2019 fiscal year.
During that fiscal year, domestic borrowings should grow by 45% to EGP725.1 billion.
Egypt adopted a strict three-year economic reform program since late 2016, starting with local currency floatation to contain dollar shortage followed by austerity measures, energy subsidy cuts, and tax increases.
The liberalization of the Egyptian pound’s exchange rate encouraged the International Monetary Fund to support Egypt’s economic reform plan by a 12-billion-dollar loan.
Egypt’s foreign reserves stood at 44.22 billion dollars at the end of April, the highest ever since March 2011, when it was estimated at 36 billion dollars.
Egypt has been facing a critical economic crisis since 2013 when Abdel Fattah al-Sisi reached power in a bloody military coup against Egypt’s first democratically elected President Mohamed Morsi.
Al-Sisi warned that strict economic measures would be implemented to seek the International Monetary Fund loan.
Since then, Al-Sisi’s government has closely followed the IMF’s reform program of so-called structural adjustment
Harsh austerity policies included subsidy cuts, tax reforms and privatizations of state-owned companies were implemented by Al-Sisi’s government.
Most Egyptians, meanwhile, can’t afford their cooking oil. In addition, the living standards for most Egyptians were falling and much of the GDP growth came through notoriously corrupt privatization scheme