ArabFinance: Egypts gross local public debt inched up to EGP 4.7 trillion, representing 81% of the countrys gross domestic product (GDP) by the end of fiscal year (FY) 2020/2021, compared to EGP 4.3 trillion in FY 2019/2020, recent data by the Central Bank of Egypt (CBE) said.

On the other hand, Egypts total external debt increased by 11.6% by the end of FY 2020/2021 to $137.9 billion, compared to the end of FY 2019/2020.

The countrys external debt to GDP ratio inched up in to 34.2%, which is within the safe limits as per international standards.

In FY 2020/2021, Egypts debt service recorded a total of $15.8 billion, $11.7 billion of which were repaid in loan instalments, while $4.1 billion were paid out in interest, according to the CBE.

Regarding the performance of the balance of payments, Egypt managed to attain an overall surplus of $11.9 billion compared to an overall deficit of $8.6 billion posted in FY 2019/2020 despite the severe consequences of the COVID-19 pandemic.

The CBE said that this surplus was achieved despite an increase in the current account deficit that reached $18.4 billion in FY 2020/2021, up from the $11.2 billion recorded in the previous year, due to the increase of the non-oil trade balance deficit and the decline in service balance surplus.

Thus, Egypts non-oil trade deficit jumped by 16.7% to reach $42.1 billion, up from $36 billion recorded in FY 2019/2020.

Additionally, the service balance surplus significantly declined in FY 2020/2021, by 42.9%, to $4.9 billion, down from the $9.9 billion recorded in FY 2019/2020.

According to recent data by the International Monetary Fund (IMF), the COVID-19 pandemic has disrupted the declining trend of Egypts debt-to-GDP ratio since 2016/2017, expecting public debt to return to a downward trajectory in the current FY 2021/2022 as growth rebounds.

A sustained reduction in public debt will require renewed reform momentum to support continued strong growth and that a comprehensive structural reform agenda is essential to help foster private sector development and unleash Egypts considerable growth potential.

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