IMF expects Egypt’s public debt to decline to its pre-pandemic levels by 2026

IMF expects Egypt’s public debt to decline to its pre-pandemic levels by 2026

“Over the medium term, persistent output losses will have long-lasting effects on revenue generation across the region, despite the observed cyclical recovery — particularly in EM and MI countries and LICs,” according to the report.

Talking about the debt in a press briefing on the regional outlook, Jihad Azour — Director of the Middle East and Central Asia Department at the IMF — said that debt in Egypt is high, as is the case of many countries importing oil, and debt is very important when adopting economic policies.

“In Egypt’s case, foreign debt is not that high, the main part of Egypt’s debt is in its local currency,” Azour continued.

Notably, on Tuesday, Egypt’s President Abdel Fattah Al-Sisi directed the government to announce a clear plan to be adhered to in order to reduce debt-to-GDP ratio.

The IMF also expects Egypt’s consumer price inflation to reach 10.4% in the current FY, then to decline to 8.8% in the next FY.

Talking about the inflation rates in Egypt, Azour said that the increase in inflation following the COVID-19 pandemic has a huge impact on many countries in the region, including Egypt — where inflation reached 10.5% for this year — and this is higher than the