Egypt's external debt looms large

Significance

Meanwhile, the government is struggling with significant accumulated debt, including USD11.8bn that is scheduled to be repaid to the IMF over the next two years alone. The IMF debt is the most challenging component of Egypt’s total external debt of USD165bn, because of the tight repayment schedule.

Impacts

• Egypt will find it hard to raise fresh funds from the Eurobond market or from portfolio investment inflows due to perceived risk of default.
• The government will struggle to leverage BRICS membership to identify alternative sources of financing.
• Gulf Arab states are unwilling to make more deposits, but they will remain important sources of capital as they purchase privatised assets.
• External debt will prompt criticism of the president's stewardship of the economy, but this will not affect his re-election.