Unraveling Egypt’s external debt: problems and solutions under spotlight

Egypt is one of many countries in the world that are trying to pick up the pieces of the many consequent shocks that have recently hit the world. But not many countries are also carrying the hefty burden of a wild devaluation, outrageous inflation rates, and massive debts waiting to be repaid – only at a much higher rate, at that very same time. The situation of Egypt’s external debts was the focus of an in-depth session named ‘How should Egypt’s external debt be perceived?’ moderated by the chair of the department of economics and assistant professor at the AUC School of Business, Dina Abdelfattah. The session was part of the Business Forward 2022 annual event carrying the title and theme ‘Egypt’s economy 2023: Structural reform amidst a volatile global outlook’, and it brought together a group of economists who shed light on ways this extremely challenging time can be navigated.

Egypt’s external debt was estimated at $155.7 billion by June 2022, according to Central Bank of Egypt data and also depicted in our 2022 Economy Snapshot video. For the past months, Egypt has been dealing with extremely high inflation rates, as inflation came in at 16.2 percent in October of this year, which was up from September’s 15.1 percent, moving further above the upper bound of CBE’s 5.0–9.0 percent target band, according to CBE report. And in November, annual inflation reached 18.75 percent, according to Reuters. The higher inflation would put pressure on the central bank to raise interest rates when it next meets on December 22.