Cairo, Egypt – May 9, 2024 – Egypt’s external debt burden grew by $3.5 billion in the final quarter of 2023, reaching a total of $168 billion according to central bank data released today. This marks a steady increase from $164.5 billion at the end of September and $162.9 billion a year prior.
The significant rise in foreign debt reflects Egypt’s ambitious investment plans over the past decade. The country has quadrupled its external borrowing since 2015 to finance large-scale projects like a new capital city, infrastructure development, and military acquisitions. Additionally, the government aimed to prop up the Egyptian pound, its national currency.
However, the ongoing war in Ukraine triggered a flight of foreign capital from Egypt, creating a chronic shortage of foreign currency. This economic strain compelled the government to seek assistance from the International Monetary Fund (IMF). In March 2024, the IMF approved an $8 billion support package for Egypt. As part of the agreement, the government will need to implement spending cuts on major state-led projects.
The central bank reported that while the overall foreign debt has risen, a significant portion (82.5%) is long-term debt, offering some comfort. However, the total debt still represents a substantial 43% of Egypt’s gross domestic product (GDP).
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