FX.co ★ Egypt’s government debt exceeds “safe limits”

The public unrest and clashes of the opposing political forces certainly deserve the urgent settlement. However, the government debt is the holy cause. Egypt has been going through the turbulent time, the political environment in the country has been shaky, the economy has been in recession. In the turmoil of the political warfare, the financial liabilities seem to be completely neglected in this African country. According to the official data released by the national Central Bank’s experts, both the foreign and domestic debts have hit record high $243 billion at the moment in Egypt. Out of this total amount, $208.8 billion account for the domestic financial liabilities and $40 billion correspond to the foreign debt. Over the past six months, the indebtedness has swollen by $4 billion. Meanwhile, banks’ staffers assure that payments for credits will be going on in the routine manner and there is no menace of the pay-off default. Besides, politicians convince international lenders that Cairo is quite capable to fulfill the commitments; the loan repayment will be accomplished in several stages scheduled until 2040 as it was originally planned. The home state of affairs is much more complicated, the domestic debt has already exceeded 80% of the country’s GDP. The data of the Central Bank reveal that 83% of the internal debt account for the government, 4.4% - for the economic state agencies, and 12.7% - for the National Bank of Egypt. Thanks to the overthrow of the illegal Islamist government, Cairo was able to rely on the financial aid from Qatar and other wealthy emirates of the Persian Gulf. The sheiks rendered financial and economic assistance to the amount of $12 billion a part of which was donated and the other part was provided on credit basis.