Egypt's external debt declines by USD7.4B in early 2024, boosted by UAE investment deal

(MENAFN) In the first three months of 2024, Egypt's external debt decreased by USD7.4 billion, according to recent data from the Central Bank of Egypt. This decline brought the total external debt down to USD160.6 billion by the end of March, compared to USD168 billion at the end of December 2023 and USD164.5 billion at the end of September 2023. The reduction in debt is partly attributed to a significant financial boost Egypt received from a USD35 billion deal signed with the United Arab Emirates (UAE) in late February. This agreement involves the development of land in the Ras El Hekma region along the Mediterranean coast.

The central bank's report reveals that 84.2 percent of Egypt's external debt is long-term, representing a total of approximately USD106.3 billion, while short-term debts amount to about USD54.3 billion. The overall external debt now constitutes 39.8 percent of Egypt’s gross domestic product (GDP), a notable decrease from around 43 percent in December 2023. The data also shows that portfolio investments flowing into Egypt surpassed those exiting, resulting in net inflows of USD14.6 billion. This shift is credited to a restoration of foreign investors' confidence in Egypt’s economic performance.

The report further indicates that external debts owed to Arab countries total USD41.6 billion, with a significant portion owed to the UAE, amounting to USD16.4 billion or 10.2 percent of the total external debt. Since 2015, Egypt's external debt has significantly increased as the country invested heavily in infrastructure projects, including the construction of a new capital, energy projects, and support for the local currency. 

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