The Egyptian economy has been in the news lately with the recent report from the Institute of International Finance (IIF) highlighting the repayment of $25 billion of its internal and external public debt since March. This news shows the Egyptian government’s efforts to consolidate its public finances and reduce its debt, a crucial step to strengthen investor confidence and ensure the country’s economic stability.
According to the Ministry of Finance, the IIF projects a primary budget surplus of 3.5% for the 2024/2025 fiscal year, which takes effect on July 1, marking a marked improvement over current fiscal year estimates 2023/2024. This ambitious outlook marks the highest level since the start of the pandemic in 2020, reflecting Egypt’s determination to consolidate its public finances despite global economic challenges.
Fiscal decisions taken under the loan agreement with the International Monetary Fund (IMF) are expected to contribute to the reduction of public debt, by generating larger primary surpluses. This strategy aims to guarantee debt sustainability while stimulating economic growth and promoting a climate conducive to investment.
Furthermore, Egypt plans to use 50% of the proceeds from the Initial Public Offering (IPO) Program to reduce its high debt level, which reached 98% of GDP in 2022/2023. This approach demonstrates the government’s desire to diversify its sources of financing and improve its financial position in the medium term.
In conclusion, Egypt demonstrates strong economic resilience and determination to improve its financial indicators despite an uncertain global context. Recent developments demonstrate prudent management of public finances and a long-term vision aimed at consolidating the country’s economic stability.