CAIRO: The Central Bank of Egypt announced Thursday that foreign debt grew by 5.8 percent, about $2.5 billion, to a total worth of $45.8 billion at the end of first half of the current fiscal year, compared to $43.3 billion at the end of June 2013, reported Al-Borsa Business Daily.
Egypt’s total public debt registered at 1651.8 billion EGP at the end of the first half of the current fiscal year, which ended in December 2013. The report stated that the government is responsible for 84 percent of foreign debt, while 3.7 percent is from economic bodies and 12.3 percent from national investment banks.
From July to February of the current fiscal year (2013-2014) CBE’s statistical bulletin noted a 9.4 percent growth rate at the domestic liquidity, a 121.5 billion EGP increase, to a total value of 1.4 trillion EGP, Al-Maal Business Daily reported.
CBE attributed the large increase in domestic liquidity to the 9.2 percent increase in quasi money, about 87.3 billion EGP, compared to the 9.9 increase in monetary supply, about 34.2 billion EGP d,uring the same period. The report stated that the quasi money includes deposits with the local currency and the deposits with the foreign currencies.
The statistical bulletin monitored an 11.9 percent increase in local currency deposits, bringing the value to 86.6 billion EGP, and a 0.3 percent increase in foreign currency deposits, bringing the value to 700 million EGP.
Commenting on the CBE’s statistical bulletin, Alia al-Mahdi, former dean of the Faulty of Economics and Political Science at Cairo University, told The Cairo Post that the large increase in the balance of foreign debt is considered a negative indicator of the state of the Egyptian economy and the poor performance of the Egyptian government.
“Such increases in the balance of foreign debt will affect the Egyptian economy as they increase government burdens, decrease government expenses on service institutions and the infrastructure projects and decreases the growth rate,” Mahdi added.
Mahdi said the government should pay off parts of the debts in installments in order to decrease the burden.
Mahdi attributed the large increase in domestic liquidity to the decline in lending rates by the operating banks, blaming the current political situation.