Egypt’s external debt dropped by 0.5% q-o-q to just under USD 155.0 bn in 1Q FY 2022-2023 (from July-September 2022), down from USD 155.7 bn in the fourth quarter of last fiscal year, according to central bank figures. This is the second consecutive drop since external debt hit a record high of USD 157.8 bn during the third quarter of FY 2021-2022.

External debt is still running high: The figure is up some 12.8% y-o-y from 1Q FY 2021-2022. Egypt’s external position has come under significant pressure on the back of a stronger USD, higher interest rates, and turmoil in the financial markets. The EGP has lost more than half of its value against the USD since last year, making it more difficult to repay our debts.

REMEMBER- Our USD 3 bn IMF financing package is helping to alleviate the squeeze on our external position and could help attract more FDI from other quarters, while the devaluation of the EGP has seen a partial return of foreign inflows. That said, Moody’s downgraded Egypt’s credit rating earlier this month on “reduced external buffers,” while Fitch Ratings cut its outlook on Egyptian debt from “stable” to “negative” in November due to “deterioration” in the country’s external liquidity position. Fitch says the country has USD 15 bn of public external debt coming due this fiscal year and the next.