The International Monetary Fund (IMF) expects that the ratio of public debt to GDP in Egypt will decline to the pre-coronavirus pandemic by 2025 or 2026.
Egypt’s public debt will reach 94 percent of GDP during the current fiscal year, and decline to 89.6 percent of GDP in the next fiscal year, the IMF’s forecasts in the Regional Economic Outlook for the Middle East and Central Asia indicated
According to the report, a continued decline in GDP over the medium term will have protracted repercussions on the ability to generate revenue across the region, especially in emerging, middle-income and low-income countries.
As a result, debt-to-GDP ratios are expected to remain above their pre-pandemic levels over the medium term, with the exception of Egypt and Jordan, where debt will decline to its pre-pandemic levels by 2025 or 2026.
The fund expects debt levels to rise somewhat in Egypt, Georgia and Morocco during 2022 compared to 2021, which reflects the impact of currency depreciation on debt denominated in foreign currency, affected by the war in Ukraine.
The IMF expected a slowdown in growth in the emerging market and middle-income countries in the Middle East and Central Asia, with the exception of Egypt.
Growth in the emerging market and middle-income countries will slow at a faster pace, from 5.2 percent in 2021 to 3 percent in 2022, according to the report.
Due to the strong growth momentum in the first half of 2022, GDP growth for the fiscal year as a whole in Egypt is expected to rise to 5.9 percent, compared to 3.3 percent in 2021, before declining to 5 percent in 2023.
Growth expectations were reduced by 0.6 percent as a result of the repercussions of the war in Ukraine, according to the IMF.