Sensible or delusional? Egypt's external debt 'not a threat'- deputy PM
Eypt is safe from risks of rising external debt levels and the current debt size poses no threats, said Deputy Prime Minister and Minister of International Cooperation Ziad Bahaa El-Din in a press conference on Sunday.
The conference was held to announce the development of the “National Programme for Reforming the Investment Climate in Egypt”; he added that most of the agreements that Egypt has signed recently did not result in excessive burdens on the government and were signed under “the best conditions”.
Economic analyst and CEO of Comesa Company Sherif El-Kheriby said that he considers this statement optimistic, but that it would be possible to repay external debts once the economic situation is stable. He added that investment and tourism are the main sources of the external debt repayment.
El-Khariby clarified that the agreements Egypt has signed include loans and deposits pledged by Saudi Arabia, Kuwait and the United Arab Emirates after the July ouster of former president Mohamed Morsi.
The country’s external debt stood at 17.3% of GDP at the end of June 2013, amounting to $43.2bn. This registered a 25.7% increase compared to the end of the June 2012 debt stock, according to the October monthly bulletin of the Ministry of Finance.
The domestic debt increased to EGP 1506.3bn, registering 73.5% of GDP at the end of September 2013, an EGP 267.7bn increase compared to the EGP 1238.6bn recorded last year.
According to his official Facebook page, Bahaa El-Din was quoted in the conference as saying: “It is the time to reform the investment climate, not only amend the laws pertaining to it.”
The government aims to accumulate investments of EGP 170bn in the current fiscal year, up from EGP155bn last year, Minister of Investment Osama Saleh stated earlier in November.
Bahaa El-Din said that the government is working to implement the programme of reforming the investment climate with the participation of the ministers of Investment, Finance, Justice and Trade along with specialised experts.
He added that those responsible for the programme will build on the achievements of past reformers of investment studies, and this will develop and effective system.
Ratings agency Standard & Poor’s (S&P) has raised its long and short-term foreign and local currency sovereign credit ratings on the Arab Republic of Egypt to B- from CCC+, which reflects S&P’s views that Egyptian authorities have secured sufficient foreign currency funding to manage Egypt’s short-term fiscal and external financing needs.
Bahaa El-Din noted that the upgrade of Egypt’s credit rating is considered a “positive step that we can build on to reach this goal”.
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